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Fox Sees Upfront Volume Fall In Tough TV-Sales Market

TV’s Fox network expects to complete its upfront ad sales with volume lower than what it sold in 2013, according to  a person familiar with the situation, owing to ratings shortfalls at the network, which has seen its flagship “American Idol” decline.

Ad-buying executives suggested Fox’s volume of advance advertising commitments could have fallen by as much as 10% to 15% below the $1.78 billion to $1.79 billion it secured in last year. Following that estimate, Fox may have notched between $1.51 billion and $1.61 billion.

Fox secured many of its deals by accepting a narrower increase in price than it did in 2013, according to media buyers and other people familiar with the sales process. Fox did many deals that called for an increase in the rate of reaching 1,000 viewers of between 2.5% and 3.5%, compared with a rate of increase of between 5% and 7% in 2013. The rate of increase, also known as a CPM, is an instrumental part of these annual talks between advertisers and TV networks for the sale of TV ad time.

A person familiar with the situation said Fox had sold approximately 75% to 80% of its available ad inventory, a little less than it sold last year. Many TV networks are believed to be holding back more time than in past years for sale as “scatter,” or ad time that is sold closer to air date and that in a good market can require a premium. Ad buyers have indicated this year that many advertisers registered lower budgets, owing to economic concerns and new emphasis on emerging digital media like streaming video and mobile devices.

While Fox secured some of the smallest  CPM increases  in this year’s broadcast market, the network’s prices remain at a relatively high level, owing to the young male audience many of its shows draw. Next season, Fox will rely on such fare as “Gotham,” a drama set around the Batman comicbook character and “Red Band Society,” a genre-busting drama that focuses on a group of kids in a hospital and the ties they forge.

Fox pushed hard for deals that used “C7,” or commercial viewing up to seven days after an ad initially airs, with multiple buying firms, according to the person familiar with the situation. GroupM, a large buying shop owned by WPP, has been writing “C7” deals with all the English-speaking broadcast outlets that, according to people familiar with the process, secure lower price hikes in exchange for giving the networks credit for a broader range of viewers.

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