Buyers Eye Less UpfrontSpending on Broadcast

Additional content could slow ratings erosion

Complete Coverage: Upfronts 2013

The broadcasters spent upfront week showing off new series with old and new stars, while showcasing plans to cut down on reruns and capture more viewers on tablets and smartphones. But media buyers and analysts say the broadcasters' take in this year's upfront could be 5% lower than last year.

Two senior buyers, who preferred not to be identified as negotiations were beginning, said they expected overall spending in the upfront market to be flat, with the broadcasters' volume declining by 5% reflecting lower ratings, and cable's increasing by a similar amount. The drop reflects lower ratings this season, but higher prices on a cost-per-thousand-viewers basis.

Analyst John Janedis of UBS also forecasts a 5% decline in broadcast dollars in the upfront. He sees cable nets' volume up in the mid-single digits.

"Chatter is heating up," Janedis said in a note to B&C. "We expect a market where CPMs for cable nets increase in the 4%-7% range, with [broadcast] nets slightly better."

Despite the dour financial forecast, buyers were somewhat encouraged by what they saw during a long week of miniburgers and vodka. Some said ABC and NBC appeared to be aiming for the kind of mass-entertainment shows that have made CBS the top broadcast network.

"In general everyone had more shows that looked promising than the last couple of seasons," said Todd Gordon, executive VP at MagnaGlobal. "Everyone is programming Friday night really aggressively. It's good to see. Everyone is not only programming the start of the season until November, they're programming the summer and then other down periods. Everyone is limiting the repeats of their dramas. There's going to be a ton of original content all year, and that should help."

Other buyers pointed out that while each broadcaster made claims about categories in which it was No. 1, or the fastest-growing, as a whole, network ratings have declined substantially.

"Talk about grading on a curve. If I was graded like that, I would have gotten into Harvard," one buyer said.

A wild card in the negotiations was how much money earmarked for video would go to digital rather than traditional television. "If a significant amount of money shifts, it will have an impact," Gordon said.

New Traditionalists

During their presentations, the networks asserted the power of broadcast and their ability to reach viewers on non-traditional platforms and devices.

At the NBC upfront on May 13, Linda Yaccarino, president of sales for NBCUniversal, talked about how the network was at the center of her unified team that sells two broadcast networks, 18 cable networks and more than 50 digital properties. "Our management team is determined to invest in the content, analytics, technologies and people that will sell more of your products and ideas faster and better," she said. At USA Network's upfront on May 16, Yaccarino again took to the stage to explain that USA does stand alone but is buttressed by NBCU's other assets.

Rob Tuck, The CW executive VP of sales, stressed that the network had been a pioneer in selling broadcast and digital together. The network is expanding its digital distribution via Apple TV and announced CW Seed, a digital content platform.

ABC was "combining the best of broadcast with the dynamics of digital" as part of its ABC United advertising packages, president of sales Geri Wang said. Fox ad sales president Toby Byrne looked ahead toward the promise of digital ad insertion.

At its presentation, Turner redefined itself as a "multiscreen video company who serves multiple audiences." At CBS' upfront, where sales president Jo Ann Ross wore a dress that lit up with messages like "YOUR AD HERE," there was a bit more of an old-school approach, including the suggestion that when networks talk too much about their multiple platforms, they must not have much to talk about in terms of programming.

And in terms of the programming, Billie Gold, VP and director of buying/programming research at Carat, felt this year's crop was about averageâ€"which is better than last year. "None of the pilots really wowed me, but a couple have the potential of breaking out," including NBC's The Blacklist and ABC's The Goldbergs, she said.

Analyst Todd Juenger of Sanford C. Bernstein summed up the programming presentations this way: "Fox is in the biggest hole, and nothing we saw will dig them out. ABC has the biggest upside. Turner is throwing a lot against the wall. And CBS returns the most shows and adds to its strength, while everyone else scrambles."

As the week ended, the jockeying for position had already begun, with a report emerging that Viacom, whose networks have struggled with lower ratings, was again looking to make early deals that would trade lower price increases for additional sales volume.

"A lot of cable networks are looking for volume," one buyer said.

On the other hand, David Levy, president of sales, distribution and sports for Turner Broadcasting, said several buyers were looking to make early deals at low prices, something he was not interested in.

E-mail comments to jlafayette@nbmedia.com and follow him on Twitter: @jlafayette