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Disney Sees Volume Gains for TV Upfront at ABC, Kids’ Networks

Late-night’s Jimmy Kimmel and a slew of new kids’ offerings drew advertisers to Walt Disney’s Disney/ABC TV, which notched gains in the volume of advance advertising commitments it sold in TV’s annual upfront. The results – announced publicly by the company – offer another signal that the market for TV advertising has been healthier than expected.

The company said volume was up between 3% and 5% at broadcast, but up in a high-single digit percentage range across all its, broadcast,cable and kids-TV holdings.  The company’s Disney/ABC TV operations include the ABC broadcast network. the Freeform cable network and the company’s suite of kids outlets: Disney Channel, Disney XD and Disney Junior. ABC secured between $1.7 billion and $1.96 billion in ad commitments allocated to primetime in 2016, according to Variety estimates. If the network were able to grow volume by 3% to 5%, then it could have secured between $1.75 billion and $2.06 billion for its primetime schedule.

The Disney results – which do not include sports-cable division ESPN – suggest advertisers are looking for favorably on TV at a time when they have expressed frustration with digital media. In recent months, measurement of video views at Facebook has come under scrutiny and some marketers have expressed concerns about the type of content their ads accompany on Google’s YouTube. Meanwhile, executives familiar with these annual talks between U.S. TV networks and Madison Avenue over prices for the bulk of TV ad inventory that accompanies the next season’s programming suggest a few categories have boosted the money they intend to spend on TV.

The company saw increased spending by consumer packaged goods companies and pharmaceutical manufacturers, said Rita Ferro, president of ad sales for Disney/ABC TV, in an interview. “They spend broadly across all the dayparts,” she said. Ferro was elevated to her role earlier this year, and said the company worked to sell broader packages to advertisers across a portfolio of networks, rather than having each one negotiate separately.

ABC pressed for rate increases. another sign of a robust market ABC sought high-single-digit percentage increases in the cost of reaching 1,000 viewers – a measure known as a CPM that is integral to these discussions – on broadcast and cable. In 2016, ABC pressed for CPM hikes of between 8.5% and 10% for broadcast primetime. The company said CPM increases came to as much as “low double digit” percentages for late-night and kids’ TV.

CBS has also seen advertisers place increased emphasis on dayparts other than primetime. CBS expects the volume of ad commitments it gets for its primetime offerings to be flat, according to people familiar with the matter, but projected volume increases for late-night and morning programs.

ABC said advertisers showed interest in its coming revival of “American Idol,” and new ABC programs like “The Good Doctor,” “The Mayor” and “The Gospel of Kevin.” Freeform’s “”Marvel’s Cloak and Dagger” and Disney XD’s “Duck Tales” also proved of interest, the company said.

Disney took the rare step of disclosing its upfront results in an open statement – a rarity for the industry. Most of the information about TV’s advance advertising market leaks out through conversations with executives on both sides of the negotiations. Because the discussions are for ad commitments, however, not hard cash, the networks are loath to offer hard figures. Advertisers can decide later on to take back some portion of their commitment if they choose, and as a result, it’s hard to draw a straight line from upfront ad hauls to bottom-line results. Disney’s release did not offer information on actual volume of commitments sold. The only time a network has done that in the recent past came in 2005, when ABC disclosed it had secured around $2.7 billion for primetime commercial inventory.

Correction: ABC’s volume of advance ad commitments for primetime rose 3% to 5%, meaning the network could have secured between $1.75 billion and $2.06 billion. A person familiar with the network’s negotiations initially indicated primetime volume had risen 8% to 9%, resulting in what could have been volume of $1.84 billion to $2.13 billion. ABC later revised its estimates publicly.

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