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Studios cut back on upfront spending

Sales 'return to normalcy' from last year's huge demand

Hollywood studios are spending less dough this upfront season according to several network execs who were surprised by the drop-off as broadcasters wrapped up their sales and big cable networks edged towards the finish line Thursday.

“It’s surprising. The overall decline is hard to tell yet, but it’s definitely not as robust as it was in the past,” said one exec, both for theatrical releases and home entertainment.

“Maybe the industry doesn’t have the same big release schedule this year it had last year,” said another.

Auto, tech. retail, food and quick service restaurants were all big. One net saw a dip in pharmaceutical business. And no one was much interested in talking about GM which has been asking for massive price cuts from last year – as much as 20%. “GM is still a major client” and one of the nation’s biggest advertisers, said one network insider. Another said a rate decrease of that magnitude was pretty much impossible. “The market won’t bear it,” he said. “But you want to try to work with them if you can.”

NBC and Fox closed their upfront sale Wednesday, making it a wrap for major broadcasters in a market that insiders characterized as steady and decently healthy. It was nothing like last year’s huge demand, speedy finish and double-digit CPM increases. But after ups and down — the 2009 upfront in the midst of an economic crisis was particularly nasty – this year “is a return to normalcy,” said one exec.

“It was almost a boring upfront, and that’s not necessarily a bad thing after all the highs and lows,” said another.

CBS, as expected, showed the strongest rate gains. NBC, which has been struggling in the ratings for years, showed signs of revival. The big four networks and the CW locked in an estimated $9.1 billion in advertising sales for the upcoming TV season, down from about $9.2 billion last year.

Major cable groups will start moving next. Turner Broadcast is said to be “directionally done” with 85% of its inventory sold, 8% CPM increases, and dollar volume up in the mid-single digits.

The Peacock posted CPM increases of about 6%. It booked about $1.8 billion in business — up $100 million from last year, according to industry sources. And it sold about the same amount of inventory as a year ago — in the high 70% range. Sources suggested NBC was benefiting from higher ratings on several new shows like “Smash” and “The Voice.”

Fox ended with price increases of 8-9% and volume flat, bringing in north of $1.9 billion with a sellout of about 80%, same as the year before.

CBS and ABC wrapped their upfronts earlier in the week. ABC’s dollar volume was flat year on year, said to be about $2.4 billion. CBS is said to have taken in $2.6 billion range. It held back more inventory for the scatter market. CBS posted the highest rate increases at a solid 9%. It had pushed hard for double digit gains.