There has been much analysis written in the past few weeks about why the broadcast network upfront is proceeding at a snail’s pace. Some of it is blamed on the large number of media agency reviews being conducted by marketers. Some of it is blamed on the continued move from C3 to C7 as a ratings guarantee currency. And some of it is blamed on the more complex nature of negotiations as agencies are buying not only linear commercial time but ads on TV network digital platforms.
However the most significant factor when you talk to media buyers is simply there are no must see or must buy shows on television, either on broadcast or cable.
Media buyers say excluding NFL games, there are only three primetime entertainment series — Empire on Fox, The Big Bang Theory on CBS and The Walking Dead on AMC — that might be classified as big time TV hits.
As Broadcasting & Cable reported on Wednesday, some media buyers and sellers are expecting as much as a 10% drop in sales in the current upfront. And high-end price increases for some of the early deals are said to be topping out at 4.5%, down from 8% in last year’s upfront.
There’s logic in the agencies not rushing to do deals at higher prices than should be paid for programming that is not only not high rated but also will have plenty of commercial time available whenever the agencies decide that want to finalize their deals.
Because just a handful of major holding companies represent most of the primetime ad spending, no network can afford to shut out one of them. Each of the major agencies represents too many major advertisers and too large a chunk of cash for the network to just write them off. So inventory will be available if they choose to play a waiting game with the networks.
This season there were only three non-sports broadcast primetime shows that averaged more than a 3.0 18-49 demo rating: Empire (5.0), The Big Bang Theory (3.8) and The Voice (3.2).
Another 19 shows averaged between a 2.0 and 2.9 in the 18-49 demo. The rest were below a 2.0. And while there were 10 non-sports shows that averaged more than 10 million viewers, most of them had 19-49 demo ratings of below a 2.0.
Yes, NCIS on CBS is the most-watched drama on broadcast television, having averaged 15.5 million viewers per episode this past season, but there are a slew of other dramas that draw large enough audiences that if marketers are shutout on NCIS, they could replace it with other buys. And as large an audience as NCIS drew, it still only averaged 2.1 in the advertiser key 18-49 demo.
The Voice averaged a 3.2 18-49 demo and 11.8 million viewers, but it airs twice a week and if the demand ever outweighed supply, NBC could always add another weekly edition, much like Fox used to do with American Idol, if advertiser demand was there. So why rush in to buy?
The next two highest 18-49 demo rated broadcast entertainment series behind Empire, Big Bang and The Voice were ABC drama Scandal (2.9) and ABC sitcom Modern Family (2.8), before a big drop-off to ABC’s Grey’s Anatomy and How to Get Away with Murder (2.3), American Idol (2.3), CBS sitcom Mom (2.3) and NBC’s The Blacklist (2.2).
Those series are all solid performers but hardly can’t miss, must see TV, with audiences advertisers couldn’t replace with a combination of other series.
The media agencies for the past decade have been wanting to slow down the upfront process and take a harder line when negotiating price, only to usually have one agency break ranks and do some early deals that kicked off the upfront and usually at prices higher than most wanted to pay.
This year has proceeded differently. This year it seems like marketers and their agencies have woken up and decided that there really is no sense in rushing into deals for programming that they can buy at a later date and still pay a reasonable price with no worries of being shut out.
How fragmented has primetime TV viewing become? A decade ago, during the 2005-06 season, American Idol was truly the must-buy show. It averaged a 12.8 18-49 demo rating and 31 million viewers. The second most-watched broadcast primetime series was ABC’s Desperate Housewives which averaged a 9.2 demo rating and 22.1 million viewers.
Other top series that season were Grey’s Anatomy (8.8 in the demo and 19.7 million viewers); CBS’s CSI (8.3, 25.1 million); Fox’s House (6.7. 17.2); ABC’s Lost (6.3, 15 million); CBS’s CSI: Miami (6.0, 18 million); and Fox’s 24 (5.6, 13.6 million), among others.
During that 2005-06 season, over 100 broadcast network primetime shows had an 18-49 demo rating of 2.0 or higher. Actually the only shows that didn’t were a handful of WB shows. That season there were 16 shows with an 18-49 demo rating of a 5.0 and higher and 16 others between a 4.0 and 4.9.
And, of course, there was a time prior to that when media buyers were calling NBC almost immediately after its upfront presentation and trying to do deals to make sure they got into its Thursday night “Must See TV” lineup.
During the 1999-2000 season, ER was the most-watched show on television, averaging a 12.0 18-49 demo rating and 24.9 million viewers. Friends, also airing on Thursday nights, averaged a 10.6 in the demo and 20.1 million viewers. Even better for marketers — ER had a median age audience of 42. Friends’ median age viewer was 37! Today, the only broadcast primetime shows with demos that low are basically the Fox animation shows on Sunday night.
This upfront, even with the highest-rated 18-49 demo entertainment series in primetime in Empire, Fox has only been able to do deals ranging in cost-per-thousand price increases flat to as low as negative 2%, compared to last year. That’s because unlike Idol in its hey-day, Empire only has a limited number of episodes and ad inventory and the rest of the Fox lineup returning from last season is ratings-challenged. Even if Fox doles out its Empire ad units in various packages, the other series will bring the package value down.
“Fox has had two years of bad numbers so it was due a correction in pricing,” says a TV network sales exec competitor of Fox, commenting on reports of Fox’s upfront deals so far.
As for the other networks, NBC and CBS are both starting to write upfront business but the process is slow. “I think slow and methodical for both sides makes sense, so we are totally fine with the pace,” the network exec says, adding, “at the end of this upfront, both sides will walk away thinking they should have done better, which will mean the right deals were struck.”