|
|
|
near-final tally: $6.93B
13% decline from last year's $8B sellers' rout
By Kevin Downey
The final numbers are just about in for this year's broadcast upfront market, and they are not pretty for the networks.
As Friday wound down, with most of the season's deals done, the networks had clocked $6.93 billion in deals.
That represents declines of $1 billion and 13 percent from last year’s record $8.0 billion, making it the worst upfront since 1998.
Media forecasters had been projecting a falloff of about 10 percent for months, with a 15 percent drop being bandied about over recent weeks when it became apparent that buyers were holding out for major prices concessions.
Still, the bulk of the overall drop came less from price cuts by the networks than it did from a decline in the amount of advertising inventory sold.
Price drops were in fact fairly modest.
CBS and Fox reported declines of only 2 percent in CPMs, or the cost to reach 1,000 viewers. NBC was down 6 percent and ABC’s CPM fell by 7 percent.
Both the WB and UPN had low single-digit increases.
Buyers are reporting a sense of victory.
"We did not realize increases from any of the big networks, including CBS," says one media buyer. "We actually were able to garner decreases from them."
Another negotiator adds: "We’ve seen anything from minus 5 to minus 9 percent."
In terms of total dollar volume, NBC came out on top with $2.0 billion, or about 10 percent less than last year. The network did relatively well because it was the first to make upfront deals, offering buyers discounts to get the upfront rolling.
ABC pulled in about $1.65 billion, or about 28 percent less than last year’s "Millionaire-" fueled $2.3 billion.
CBS was down about $100 million, to just under $1.5 billion, and Fox was flat at $1.3 billion.
The WB was up about 12 percent, to $475 million.
By Friday, UPN, the last network to begin moving inventory, had sold about $55 million. More deals are expected this week.
Just why less inventory moved this year is unclear at this point. It appears to have resulted from both lower demand from buyers and a decision by networks to hold back rather than slash prices.
The effect, though, was the same, and considerably less ad time moved than in past upfronts, where typically networks unload anywhere from 75 percent to 85 percent of the coming season's ad inventory.
This year, CBS sold 65 percent, NBC sold 70 percent, and ABC and Fox sold 75 percent.
"I do believe CBS held back inventory," says a media buyer in the Midwest. "Based on conversations we’ve had with them, it seems they did hold back in hopes of being able to sell it in the scatter market."
Ad time in the scatter market typically fetches a premium over upfront prices.
Waiting for those premiums this year, however, is downright risky, since the scatter market fell apart late last year and prices dropped.
One big change in this year’s upfront that media buyers welcomed was a much slower pace to negotiations.
Prices were down so the networks were slow to start. The upfront last year was concluded by the last week of May in comparison. This year, buyers and sellers had weeks to prepare instead of scrambling in last minute negotiations.
"It’s a reflection of the marketplace and people holding back," says one buyer.
"The hope is, this will be the way of the future and people will realize this could be done in a civilized manner without working to all hours of the night."
And while some negotiations have begun for the syndication and cable upfronts, both of which wrapped before network got started last year, serious deals have yet to be made, say media buyers.
"I think this week will be quiet so it will probably finish next week."
|
2001 NETWORK PRIMETIME UPFRONT |
|||
|
Network |
Estimate* |
%
Change |
% Inventory |
|
ABC |
$ 1.650 |
-7 |
75 |
|
CBS |
$ 1.450 |
-2 |
65 |
|
Fox |
$ 1.300 |
-2 |
75 |
|
NBC |
$ 2.000 |
-6 |
70 |
|
UPN |
$ 0.055 |
+3** |
33 |
|
The WB |
$ 0.475 |
+4-5 |
n/a |
|
Total |
$ 6.930 |
|
|
|
* Based on media buyer and
network estimates as of June 29, 2001 |
|||
July 2, 2001 © 2001 Media Life
-Kevin Downey is a staff writer for Media Life.
Printer-Friendly Version
|
Send
to a Friend
Cover Page |
Contact
Us
