Broadcast Network Upfront Volume Tracking Flat

TV advertising market appears to have been less robust than expected
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With the broadcast networks nearly done with their upfront
sales, the TV advertising market appears to have been less robust than
expected. Volume for the broadcasters was tracking flat at best, according to
media buyers, while cable appeared to be headed for a gain of 5% to 7%.

With the softer demand, the price increases the networks got were smaller than
in last year's strong market, but still significant. The volume and pricing
might have left the networks with more inventory than planned to sell in the
scatter market. "Everybody had to recalibrate a little bit," said one

A wild card in this year's upfront was General Motors, the third-largest TV
advertiser, which, working with new media agency Carat, was seeking doubledigit
primetime price rollbacks from the networks.

Fox, the first network do upfront deals, reacted to GM's demands by refusing to
sell the automaker commercials during the NFL games it airs, which have been an
important part of GM's media strategy in the past. It was unclear at presstime
if GM had been able to make a deal with any of the broadcasters.

"Agencies often promise better pricing to new clients, but it's the way
they did it that rubbed people the wrong way," said one senior ad sales

The CW was the first network to complete its deals, selling about the same $400
million worth of commercial inventory as it did last year at prices about 7%
higher, despite lower ratings. The CW's sales include commercials in its shows
watched by its younger-skewing viewers online and on mobile devices.

According to industry sources, CBS was getting price increases on a
cost-perthousand viewers (CPM) basis of about 8-9%. Fox was getting increases
of about 7-8%, ABC about 6-7% and NBC about 5-7%.

In cable, Viacom, whose as sales growth has been slow, went out early, offering
below-market price increase in exchange for higher volume. Rival networks
disapproved, but buyers said it bought Viacom goodwill.

And while other major cable groups, including Turner Broadcasting, NBCU and
Fox, were making deals with price increases in the same range as the broadcasters,
some smaller cable groups were getting good volume increases by foregoing price
hikes, buyers said.