Scatter Strong for New Season

Sellers getting double-digit increases over robust upfront
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After taking in more money than expected during a
fast-moving upfront, networks are finding advertisers still have more dollars
to spend on the new TV season in the scatter market.

Broadcast and cable networks garnered commitments for about
$16 billion in ad spending during the upfront, up 20% from the previous year.
The big gain sparked some speculation that little money would be left for the
scatter market, when ad time is bought on shows closer to air, or that if the
economy weakened some of the gains would evaporate.

Both
media buyers and network ad sales executives say that the early signs are that
the advertising market remains healthy. Money is
flowing into the market and, with inventory tight after the strong upfront,
prices are up by double-digits from the upfront, when rates rose 5% to 9% for
most networks.

Scatter prices had been up sharply in the second and third
quarter, but those comparisons were to the recession-weakened 2009-2010
upfront. The fourth quarter scatter market follows the stronger upfront for the
new 2010-11 season.

At the same time, both buyers and sellers say that while the
process is only about half way over, nearly all of the commitments made during
the upfront are turning into firm orders. At this point most media buyers are
still presenting the results of their upfront negotiations to clients for their
approval.

"The big trend is that everything is sticking,"
said one buyer. "We've had vendors tell us they think the stick
rate is going to be about 95% and so far I would agree."

Advertisers tend to buy the fourth quarter aggressively in
the upfront because there is less of a lag between when the commercials are
ordered and the time they air. In the fourth quarter the network schedules are
also likely to run pretty much as they laid out in the May programming
presentations.

After an upfront where broadcast and cable networks sold higher
than normal amounts of inventory, some popular shows have become difficult to
buy, including Fox's Glee.

"I don't see any indicators of a double dip or a
slowdown," said one network sales executive. The executive doesn't
expect that to change at least until the second quarter.

The sales executive expects that fourth quarter will be
strong and that advertisers will wait to see their own fourth quarter sales
results before any decision to trim marketing spending will be made. By the
time those sales results come in, most advertisers will have missed the
deadline to use their options to cut back on their first quarter upfront buys,
so their first opportunity to make serious adjustments will come in the second
quarter.

"That's the first point when things can start to
hurt," the executive said.

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