Analyst Anthony DiClemente of Barclays Capital pronounces that the U.S. TV advertising market remains relatively resilient and healthy, and predicts gains in the upfront, but that those gains will be smaller than last year.
In a research report, DiClemente says that the Big Four broadcasters’ upfront revenue will increase 0.5% to $9.2 billion, with Fox’s total taking a double-digit drop. Cable’s upfront haul is expected to grow 2% to $9.99 billion.
“We believe this year the broadcasters will sell a similar amount of inventory as last year, as the better positioned networks lock in favorable CPM rates, while worse positioned networks may hold out for potentially better rates in the scatter market,” he says. “Bigger picture, we believe the ad market remains resilient and are maintaining our U.S. total advertising estimate of 1.9% growth in 2013, which represents an acceleration from last year when adjusted for political and the Olympics.”
CBS is expected to take in $2.93 billion, up 10.5% from last year, according to DiClemente. Prices on a cost-per-thousand viewers (CPM) basis would be up 6.5%.
Fox’s upfront volume is expected to fall 14.5% to $1.88 billion, reflecting a 5.5% CPM increase.
ABC is expected to show a 3.4% gain to $2.58 million in upfront revenue with a 6% increase in CPMs.
NBC is forecast to generate upfront revenue of $1.81 billion, up 0.4% from last year. CPMs are expected to increase 5.9%.
DiClemente expects the cable TV upfront to be up modestly.
“Over a decade ago, the 1992-1993 cable TV upfront was only $810 million in size, representing 18% of total upfront dollars. As cable penetration approaches that of broadcast, cable’s upfront dollar volume has caught up with that of broadcast as well,” DiClemente says. “While cable networks typically sell less inventory in the upfront than broadcast networks do (50-60% for cable vs. 70-80% for broadcast), the cable TV upfront has nevertheless become as important as the broadcast TV upfront. In the last couple of years, total cable TV upfront revenues has actually surpassed that of broadcast, with cable upfront dollar volume representing 51-52% of total upfront commitments. For this year, we estimate cable to retain its 52% ’share’ of the upfront, equating to a total upfront haul of $9.99 billion, or 2% year-over-year growth.”