As the upfront market gets closer, analysts are fine-tuning their expectations for how much money will change hand and what prices will be paid.
In a new report, Brian Wieser of Pivotal Research Group, revises his expectation for the upfront to reflect 8-10% CPM growth, with top-rated broadcaster CBS getting the biggest increases, based on discussions with media buyers.
“Consensus expectations from sales teams for volume are remarkably similar to those of buyers with a view toward 0-5% volume increases for primetime advertising inventory,” Wieser says.
Wieser also says that digital video sales will remain a relatively small part of the upfront.
“Buyers at agencies are keen to purchase online video inventory to create an ‘escape valve’ containing traditional TV pricing, which is what marketers care about most,” he says in his report. “Sellers would generally love to sell it to capture a higher volume of dollars, as they care about boosting revenues. However, sellers expect limited bundles of sales of digital inventory. This is primarily because little inventory actually exists today: consumption of online video remains de minimus (low single-digits of equivalent viewing hours for comparable properties) when compared with traditional TV.”
Meanwhile, David Bank of RBC Capital Markets, says that “as 2012-2013 upfront chatter heats up, our industry sources indicated upfront-over-upfront pricing could be up approximately 6-7%.” In a new report, Bank says those levels would represent a “somewhat healthier” increase than industry execs might have guessed a few months ago when the European debt crisis was casting a pall over the economy.
“Our sense is that certain cable networks could potentially come in at the higher end of or above that range (TBS, Food Network, etc.), while of the broadcast nets, CBS could approach double digits,” Bank says.