Upfront Reality Check
By J. Max Robins -- Broadcasting & Cable, 6/24/2007 8:00:00 PM
By the end of last week, the combined bucks committed by ABC, CBS, FOX, NBC and The CW in that frenzied buying bazaar known as the upfront—where the majority of ad time is bought for the coming primetime season—was tabbed at north of $9 billion. That number was a tad more than last year's take.
Still, it's a welcome move forward when you consider how flat the tally has been for the last couple of years.
Everybody benefited in the bump. ABC saw an estimated 8%-10% increase in ad rates, with CBS and Fox just a tick behind. The fledgling CW was touting 11%-12% growth in CPM and even ratings-challenged NBC saw a 4%-6% pop.
Their ratings may be trending downward, but these old-media guys deliver mass. Yes, it's not as big a crowd, but in an increasingly narrowcast environment, the value of what the big networks have to sell is up. That, in a word, is the download.
Far be it from me to sound like a network shill, but the ever-splintering media environment that has been chipping away at the broadcast-network share for two decades is inspiring its new signs of life.
If you're in the mass-market business, mega-hits and events—whether American Idol, Grey's Anatomy or the Academy Awards—are more valuable than ever.
Ironically, the networks also got a lift from DVR, the technology a lot of wise folks figured would drive a stake through the business. After months of haggling and hand-wringing, Network Row came to an intersection with Madison Avenue and pretty much accepted that ad rates should be set by a new Nielsen commercial metric, and not show ratings.
In a further negotiation worthy of Solomon, both sides agreed to include ratings for recorded shows watched within three days of their initial run.
It's to be applauded that such a compromise was struck, but I'm more than a little shocked the advertisers are buying it. Believe me, there's as much platinum value as ever in so-called “TiVo-proof” programming that viewers prefer to watch live, from shows of the reveal variety, such as Idol and Dancing With the Stars, to major sports. But it's a leap of faith to assume that viewers are actually watching commercials in shows they record. And that reality check could counter the upfront giddiness.
For months, network research types have been claiming they have the data to show that 40% of the audience is watching commercials in the programming recorded.
If you buy that, I have some WMDs I'd like to show you in Iraq.
Let's see a show of hands. How many of you have a DVR? The national number is about 20%, but I'd bet among B&C readers, it's easily three times that or more. So how many of you regularly skip commercials of shows you record? Don't be shy now. Look around at yourselves. It doesn't seem anywhere near 40% from where I sit.
It will be interesting to see what those live and recorded commercial ratings look like over the next several months. Remember the magic formula: If the networks don't deliver the ratings promised in those upfront buys, they have to make good on shortfalls. My bet is, they'll have plenty to make good on.
Steve - 6/23/2007 9:31:00 AM EDT
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