Upfront Commercial Price Expected to Rise

Nets looking at successful upfront season, though NFL labor stoppage looms
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For
the second straight year marketers are expected to spend more money in
advance on commercials for the upcoming season, according to The Wall Street Journal.

TV
advertising continues to be the one marketplace to remain unaffected by
the current economic climate; last-minute spots during the spring as
well as the advance cost for the fall are both rising. Barclays Capital
projects the broadcast networks to have a growth of 7% to 8% and a 15%
for cable.

In
2010, ad spending rose from 2009's dismal recession. The broadcast
networks saw upfront commitments grow 15% to $7.37 billion, says BofA
Merrill Lynch Global Research. The Cable Television Advertising Bureau
reports that cable networks experienced an even greater 19% rise to $8
billion. Commercial price rose 9%.

Not
everyone shares the same rose-colored viewpoint however. Some ad buyers
argue that the constant upward motion of prices could push marketers to
go online instead.

The
National Football League's bleak labor situation also could throw a
wrench into the marketplace, though it could it end up being a gain for
broadcast. The threat of any missed games could force NFL advertisers to
reserve more space in primetime, which would drive up the prices even
further. On the other hand, some TV execs worry that any cancellation of
games would see marketers backing out of their commitments made during
upfront season, leaving potholes everywhere.

In
the coming weeks, companies such as Viacom, Discovery Communications,
CBS Corp, Time Warner Inc. and Walt Disney Co. will be reporting their
first-quarter earnings.

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