Pre-Upfront Dance Predicts Another Strong Market, But Maybe Not For The Expected Reasons
It's pre-upfront time and network executives are touting double-digit price increases. So what else is new?
Speaking at a recent investor event, CBS Corp. President/CEO Les Moonves not only touted another round of big price hikes but said CBS would sell a bit more of its commercial inventory supply -- a little over 80% or so.
The marketplace may in fact warrant this, but possibly not from the usual place -- TV advertiser demand.
In fact, Nielsen numbers this past fall revealed that the number homes in the U.S. TV universe dropped for the first time since it started recording TV data -- to 114.7 million from 115.9 million homes.
Why the slide? Some TV homes slipped into the cracks due to economic concerns, others due to alternative entertainment options, and others due to the digital TV changeover a couple of years back. It’s only a 1% decline, but points up seismic changes in the media/entertainment landscape.
This means fewer possible homes for big TV advertising messages -- and not just for broadcast, but now cable networks as well.
As you know, it's not all bad news. Last year's 10-17% price increases for cost per thousand viewers (CPMs) more than made up ground for many networks -- cable and broadcast -- especially for those that had year-to-year viewership declines in the mid-single-digit area.
Some stock market analysts predict a somewhat less ebullient TV advertising market come this June/July, but still a strong-ish 8% price increase in the market.
We can, of course, expect nothing less from network executives touting a strong TV advertising market. A slow, but continuing, improvement in the economy would seem to also contribute to these predictions. But increasingly all the reasons for where the upfront market will be -- even in future years – aren’t always apparent.