Fox has completed a big chunk of its upfront sales, while negotiations between the other broadcast networks and major media buyers continue.
After a season in which its ratings declined 22% among viewers in the 18 to 49 year old demo, Fox is managing to get price increases from advertisers in the 5% to 7% range on a cost-per-thousand-viewers (CPM) basis, people familiar with the negotiations said.
But with ratings down so steeply, Fox's sales volume in this upfront is expected to be lower than last year, which they slipped to $1.9 billion.
Buyers said that most of the big agencies had gotten their deals done with Fox. The network suffered a big ratings falloff on American Idol, which lost its crown as the most watched primetime series. The buyers say Fox remains attractive because its audience skews relatively young, making it desirable to advertisers in businesses like movies, technology and quick-serve restaurants.
The other broadcast networks were still mostly talking with the big agencies, with only a few deals done.
ABC did some deals, with prices in the 7% to 8% range. But that handful of early deals might not yet be indicative of where ABC's price will land.
CBS, the top rated network last season among adults 18-49, is expecting upfront price increases in the double digit range, CEO Les Moonves told investors earlier this month. The network appears to be waiting until buyers, who are paying smaller increases with its rivals, come up to its price. "We are in active negotiations with major agencies across the industry. We look forward to another successful upfront where we are confident we will lead in both volume and pricing," a network spokesman said via email and over Twitter Friday afternoon.
NBCUniversal was sticking to its strategy of trying to sell advertising packages that include its broadcast network, cable channels and online properties. Despite resistance to a high asking price for Modern Family on USA Network, buyers at major agencies said they were negotiating with NBCU on a portfolio basis. NBCU did manage to complete some deals with mid-sized to smaller buyers comprised of broadcast, cable and digital, according to sources close to the negotiations.
Sources said the CW was writing business on Friday. With its young viewership, the network was a pioneer in selling its views who watch on line in addition to those using traditional TV.
With broadcast ratings down overall in the 2012-13 season, analysts are expected total upfront volume to be down 5% from the $9 billion in commitments agreed to a year ago. "In general we think the market is developing in-line to slightly ahead of expectations from a pricing perspective," said analyst John Janedis of UBS in a research note Friday.
On the cable side, Viacom completed a number of deals. An analyst said that by offering prices increases smaller than those being sought by other major cable programmers, Viacom has been able to increase its sales volume, despite having lower ratings on some of its key networks. Some market sources say Viacom is offering increases as much as 3% points smaller than where the market is expected to settle.
Some other cable programmers completed deals with mid- to small-sized agencies, sources said, but most were expected to wait until broadcast deals were done.
Some network sales executives said that they were feeling exaggerated price pressure because several large advertisers had switched agencies in the past year, and the new agencies were looking to deliver better deals for their new clients. Some of these major national television spenders include Honda, Kraft/Mondelez, Honda, Nestle and Walgreens. The networks faced a similar situation last year when General Motors moved its account to Carat, which started negotiations by demanding substantial rollbacks from the media companies it did business with. Those efforts drew mixed results, as some outlets offered lower prices to increase their share of GM's spending, while others sold GM a larger share of their cheaper inventory in order to lower their average cost.
There were also some clients seeking more liberal cancelation terms. In the upfront, buyers have options to cancel some of their purchases on a quarterly basis. Some clients were seeking terms closer to those they get with digital inventory, such as a 30-day rolling cancelation clause. Buyers and sellers said that issue was still being negotiated.