Prime time is looking "not terribly robust," Falco said, with NBC mired in fourth place--and advertisers in general indicating they will hold money back for idea-based, multi-platform opportunities later.

"Everybody is holding back just a little bit of money," he said. "When good digital ideas come in, they want to be able to participate."

Advertisers have hinted that as audiences increasingly migrate to broadband (and mobile devices) and programmers beef up their online offerings, they want to have the flexibility to experiment in the new arena. A recent example is ABC's decision this spring to stream full episodes of hit shows "Lost" and "Desperate Housewives" on ABC.com with interactive ads.

In general, Falco--who made his comments at a news conference where NBC unveiled its new fall prime-time schedule--reiterated what advertisers have expressed recently: that the upfront is losing some importance as marketers deemphasize purchasing a schedule of spots in favor of a holistic plan predicated on a breakthrough idea. Those deals--which can include attaching a brand to a show's incarnations both on-air and off, with perhaps some product integration thrown in--take time to develop and negotiate, and may be difficult to complete within the time pressures of the upfront bazaar.

"It isn't quite the rush that it used to be," Falco said.

Falco cited Johnson & Johnson as an example of an advertiser that has expressed a desire to sit out the upfront and make deals in August.

To reinforce the point, he said before new media blossomed, NBC sold about 83 percent of its inventory in the upfront, which dropped to about 75 percent last year and may decrease to the 70 percent range this spring. But he expects NBC's new schedule--which includes four new dramas and two new comedies in September--to generate enough money in the scatter market to offset the upfront revenue loss.

NBC, which saw ratings plummet in the '04-'05 season, saw upfront revenues drop by $900 million in last spring's upfront to $1.9 billion. Ratings erosion has continued this season, with the network down 14 percent in regularly scheduled programming in the 18-to-49 demo, the core of what is sold in the upfront.

The network does have a favorable upscale profile that it can use for some leverage. And it has the NFL joining its schedule this fall, which Falco said has already proven to be a big draw. Even with pessimism on the volume front, Falco said he expects NBC to be able to eke out CPM increases.

Despite gloom in NBC's prime-time fortunes, Falco said the outlook for the broader NBC Universal family was bright. He said he expects the company's cable revenues to rise some 3 to 5 percent, and volume for its Spanish-language Telemundo network to jump by double digits.

NBCU's cable properties include USA--the number-one cable network in prime time--along with the top-10 Sci Fi Channel and Bravo. Telemundo badly trails Univision, the leader in the Spanish-language market, but may benefit from growth in the Hispanic population and advertisers' increased desire to reach that market, a segment that is expected to grow consistently for years.

"Advertisers still haven't recognized how big the Hispanic marketplace is," Falco said. "It's three to five years from really reaching its entitlement."

One of the issues expected to most divide buyers and sellers in the upfront is how to value Nielsen's new ratings that measure shows viewed via DVRs, where a large volume of commercials are believed to be skipped. While buyers have said they will only pay for "live" ratings, Falco said he will press to be compensated for additional ratings generated from DVR viewing. "I'm not going to cede the point before we negotiate," he said.

Looking further into the future, he said NBC will never participate in a proposed new online buying and selling process via a system developed by eBay. Under the proposal floated by some ANA members and agency executives, a buyer could display a media plan it is looking to purchase and networks would bid for the business--or networks could offer time that buyers would purchase in the auction style. "That's ridiculous," Falco said. "We'll never do that. That commoditizes your product."

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