Switching channels

With NBC toppled from throne, nets set to collect from upfront sales

After years of suffering the Peacock’s strut, the Eye is poised to rule the barnyard during this year’s upfront ad market. Meanwhile, the once-frazzled ABC is fast becoming the darling of the henhouse.

Toppled from its roost this season in the key adult 18-49 demo, NBC’s total take from the upfront could be only $2.2 billion-$2.3 billion — far shy of the $2.9 billion it wrote last year. But industry observers say NBC could still command solid rate increases, noting its fan base of upscale viewers.

The four-way race for the key demo is uncharacteristically tight, though NBC will end the season squarely in last place.

Even Madison Avenue agrees that the total take by the six broadcast nets should come in slightly ahead of last year’s $9.1 billion pot. Cost per thousand (CPM) increases will likely be up 3%-5% collectively.

Heading into the upfront, the Eye’s leverage could be greater than ever. Already the most-watched network, CBS is in a tie with Fox for the 18-49 demo. Take away sports and the Eye’s lead is clear cut.

“We have have strength across six to seven nights of our schedule,” says CBS Network Sales prexy Jo Ann Ross.

But the Alphabet won’t be the ugly step-sister it was at last year’s upfronts thanks to runaway hit “Desperate Housewives” and strong performing “Extreme Makeover: Home Edition” and “Lost.”

“Obviously we’re playing a pretty good hand because we’ve had tremendous performances. We’ve been able to substantially increase the number of advertisers coming to us,” says ABC sales and marketing prexy Mike Shaw.

Over at NBC too execs are putting an upbeat face on its prospects: “For the first time in a long time the six nets are flat — we haven’t lost any audience. It’s very good for our business,” says NBC Universal Television Networks Group prexy Randy Falco. Of course, take out NBC’s whopping 14% collapse this season, and the six-net average would actually be up.

Falco’s optimism isn’t shared on Madison Ave., where media buyers will have to justify whatever increases the networks seek to purchase roughly the same number of eyeballs.

Buyers say advertisers will continue to shift money to cable and other platforms, such as the Internet, which has quietly become an $11 billion advertising business.

“I want to keep a good portion of my money in broadcast,” says Andy Donchin, director of national broadcast for Carat Americas. “I would hope the networks will work with us this year to keep as much money as possible on them and not on cable.”

Buyers say it’s too early to tell how robust demand will be for broadcast; most of their clients haven’t yet submitted ad budgets for 2005-06 season.

Here are some predictions on what the various nets might make, based on interviews with broadcast execs, media buyers and industry observers. (Keep in mind that TV folks accuse media buyers of low-balling the numbers; media buyers say the reverse.):

  • CBS is widely expected to lead the pack, both in terms of total upfront business and CPM increases. Eye could potentially write $2.4 billion-$2.5 billion in business and secure CPM increases of 5%-7%.

  • NBC is likely to come in second in terms of total dollars, $2.2 bil-$2.3 bil. Oberservers speculate that NBC could nab CPM increases of 3-4%, but some net will be lucky if it can manage a 2%-3% raise because it already has a steep premium on its CPMs from previous years.

  • Like CBS, ABC could be aggressive when negotiating with media buyers. Excluding sports, ABC inked $1.6 billion in upfront biz last year and secured modest CPM increases of 5%-6% that were the smallest of all the nets. This time, ABC could write $450 million-$500 million in additional business, upping its CPM increases by 4%-6%.

putting it on par with NBC.

  • Fox, whose demo success rides largely on the coattails of “American Idol,” made some progress this season by launching hits such as “House” and “Nanny 911,” while “The OC” has finally given the net an upside on Thursday. Still the net has plenty of holes, it’s predicted to ink $1.6 billion in upfront biz, roughly the same as last year.

  • Both the WB and UPN could be down from last year, when the former wrote $675 million in business and the latter, $350 million.

“I think broadcast will be pretty stable,” says Fox Network sales prexy Jon Nesvig. “So there certainly won’t be a runaway market but I think it will be a good market.”