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Broadcast Upfront Moving Along - Broadcasting & Cable

Broadcast Upfront Moving Along

Price, volume gains appear lower than expected
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The upfront moved along last week, with Fox completing its deals and ABC and The CW close to the finish line.
But some sellers seemed disappointed that in what was billed as a very strong market, price increases appeared to cling stubbornly to the 10% marker.
CBS, which came out very aggressively by asking for 18% price hikes on a cost-per-thousand viewers (CPM) basis, was able to get some business done between 13% and 16%, according to sources. But several of the major buying agencies were balking at paying such steep rises.
And NBC, this upfront controlled by Comcast, does not seem to have gotten into the game yet, having conversations but apparently not satisfied with what buyers were offering.
One source said NBC was doing deals in dayparts other than prime. Another thought that NBC might be waiting until buyers were ready to negotiate cable, where NBC Universal's portfolio is strong.
Viacom might have been the first cable programmer to complete an upfront deal, according to one ad industry source.. Before the upfront started, some rival cable network sales execs were concerned that because Viacom networks like MTV have much higher ratings this year, it would be under pressure to focus on volume rather than prices. That would prove difficult because some of MTV's programming, like the series Skins, which advertisers shunned, present content issues. But during an investor conference, Viacom CEO Philippe Dauman insisted that its signature show, Jersey Shore, had no problems with sponsor acceptance. An MTV spokesman had no comment.
Cable negotiations are expected to begin in earnest this week, as most broadcast deals get consummated.
A handful of syndication deals were also done, according to sources.
Fox, which did the upfront's first deals, announced that it had finished its upfront on Thursday. Sources said that Fox wrote nearly $2 billion in business, up about 10% from last year. A good chunk of that increase could be attributed to the addition of The X Factor to the network's lineup. Pricing on a CPM basis was up about 11% and Fox sold about 80% of its primetime commercial inventory, plus digital inventory when its shows are viewed on Fox.com and Hulu.com.
With Fox setting the bar at a fairly conservative level, ABC was pressed to do business at prices averaging about 10% above last year. But business got written, except for an agency or two.
The CW, which does much of its business based on the women 18 to 34 demographic rather than 18 to 49 year olds promised by the other broadcast networks, was also done with all but one or two media agencies at price increases averaging about 11%.
Both buyers and sales executives said that budget from clients were up, but not as much as early, exuberant forecasts.
As the week ended, analyst David Joyce at Miller Tabak + Co. lowered his expectations of how much money the four top English-language broadcasters would take in the primetime upfront to $9.490 billion based on an average CPM increase of 10.6%. In April, he had forecast that the Big 4 would take in $9.85 billion in the upfront and achieve increases of 11.4%. Last year, they sold $8.575 billion in advertising commitments during the upfront, according to Joyce.
Joyce lowered his forecast for how much each of the Big four broadcast networks would take in during the upfront, pegging CBS at $2.925 billion, down from $3 billion, ABC at $2.65 billion, down from $2.75 billion, Fox at $2.175, down from $2.275 billion, and NBC at $1.74 billion, down from $1.825 billion.
For cable, Joyce now expects the upfront to be worth $9 billion, up 11.5% from last year's market.

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