Television
Media buyers now see weaker upfront
By Lisa Snedeker
May 5, 2008 - 9:30:47 AM

At the beginning of the year, media buyers were expecting a strong upfront market for the coming season's network shows, based in no small part on the strong scatter market, where ad inventory not sold during the prior upfront is auctioned off.

But that was before the effects of the writers' strike played out in severe declines in the ratings as the networks ran out of original episodes of their top shows as the midseason got underway and began running reruns and poorly received reality shows.

Buyers now expect a far more modest upfront, with only slight increases, if any, in total sales over last year's $9.3 billion.

Lower ratings translate into substantially less ad inventory available to sell. With so much less inventory, the networks would have to get substantial increases in the prices advertisers were willing to pay for those spots just to reach least year's total sales numbers.

In a Media Life survey of media planners and buyers last week, more than a third of readers, 35 percent, thought upfront spending would grow just 2 percent over last year, a pretty modest gain.

That compares to the 5 percent increase last year's upfront brought in over 2006.

Nearly 19 percent thought the upfront would grow just 1 percent, and an even larger share, 22 percent, thought total upfront sales would come in below last year. That would be the first decline in broadcast upfront spending since the depth of the ad recession a half-dozen years ago.

In all, three quarters think the upfront will come in at 2 percent or below.

Just 11 percent of readers thought the upfront would do better than last year, with sales rising 6 percent or more.

This pessimism was a theme in reader comments about the upfront as well.

The question: What will be the biggest story of the upfront?

"Lower sales and lower-than-expected CPM increases," wrote one reader. And another chimed in, "Disappearance of dollars."

And the strongest network at the upfront? ABC, and by a long shot.

Asked which network will lead in total upfront sales, 64 percent chose the Disney network, with Fox, which has less inventory to sell, coming in a distant No. 2 at 18 percent. NBC was third at 10 percent and CBS at 8 percent. The CW got no votes.

But when it comes to CPM increases, Fox, the No. 1 network, will top ABC, readers believe. Some 41 percent believe Fox will lead in CPMs versus 28 percent for ABC, with NBC at 20 percent and CBS at 8 percent. Just 3 percent thought the CW would be the top CPM network.

But ABC comes out in the lead again when it comes to upfront presentations, with 42 percent of readers saying its is the presentation they most look forward to seeing, versus 26 percent for Fox, 16 percent for CBS, 13 percent for NBC and 3 percent for the CW.

And readers are still not sure that Fox, though No.1, has fully broadened its schedule to rely less on the strength of "American Idol," the top-rated primetime show by a wide margin.

The question: Has Fox finally found the right balance between a solid fall and blockbuster spring?

Just over half the respondents, 51 percent, were divided, agreeing with this statement: "First-year show 'Back to You' hasn't lived up to its promise but I see a lot of potential in 'Terminator: The Sarah Connor Chronicles' and some of their drama pilots. And don't forget the other networks are struggling, too."

Of the remaining 49 percent, they were split almost down the middle, with 26 percent thinking Fox had found the path, the rest thinking it had not.

The pros agreed with this statement: "Yes. With Kevin Reilly steering things, I expect it will have its best fall yet, with strong shows like 'House' and 'Family Guy' still clicking." The cons agreed with this statement: "No. They continue to rely on aging cartoons, and "Idol's" slide has me very concerned. I think they'll go backward this fall."

And of the CW?

The question: What are the prospects for the new CW as its second season comes to a close?

Somewhat short of okay would about sum it up. Readers are not impressed.

Just 10 percent thought its prospects were bright, while 51 percent thought they fell far short, agreeing with this statement. "Okay, but not nearly what many had hoped or expected. They're still recovering from a bungled launch in which they stuck too closely with the old WB/UPN shows and failed to promote the station changes in a number of markets. And I am concerned about ratings declines for franchises like 'Beauty and the Geek.'"

And 39 percent were openly pessimistic, agreeing with this statement: "Not bright at all. They had great development last year but never connected with viewers, and their schedule remains too patchwork. UPN and the WB had identities. The CW still has none and needs one badly."

Perhaps because of the severe drop in network ratings, readers think cable will again walk away with big dollars from the networks at the upfront.

The question: Will cable siphon off many ad dollars from broadcast this year, or has that era ended?

Almost half, 47 percent, thought so. "Yes, a lot. Along with strong ratings growth this year, cable has become much better at selling product, and it has a better argument with broadcast's continued ratings declines."

Just under half thought cable would do about as well as last year. "There’s room for both broadcast and cable to have good years. Each can make its own best argument."

Just 8 percent thought cable had reached a point where its days of taking big chunks of money from the networks were past.

And who among cable networks will do best? Readers chose Turner by a long shot when asked which cable network group is best positioned to see revenue and CPMs rise in this upfront.

The parent company of TNT and TBS received 31.6 percent of the vote, followed by Lifetime Networks and NBC Universal tied at 18.4 percent, Discovery Communications at 10.5 percent, and A&E Networks and MTV Networks both at 7.9 percent. Five percent chose “other.”