TV media buying and selling executives now seem to have a similar perspective for the upfront selling period for the 2012-2013 TV season: modest dollar revenue gains.
Brian Wieser, senior research analyst of Pivotal Research Group, writes in a recent report: “Consensus expectations from [TV] sales teams for volume are remarkably similar to those of buyers, with a view toward 0% to 5% volume increases for prime time advertising inventory.”
Last year’s upfront take for broadcast networks had been estimated around $9.0 billion, with cable TV networks taking in roughly a bit more at $9.3 billion.
Both buyers and sellers, according to Wieser, are estimating an 8% to 10% hike over CPM rates set during the upfront a year ago. A year ago at the upfront, CPM increases were around 9% to 12%.
Back in late February, Wieser surveyed mostly media buyers for his original estimates. In line with these estimates, senior media buyers at the recent MediaPost Outfront event believed that around 3% more in upfront volume could be expected this ad selling season.
As other media analysts have noted, Wieser says there is “no correlation -- at least on the network TV level -- between upfront pricing and broadcast-year revenues.” Much of this depends on the yet-to-be determined levels of inventory sold during the upfront, which can range from 70% of commercial inventory supplies to 85% levels.
Still, Wieser says this should help media companies' Wall Street fortunes. “If nothing else, it should contribute to positive sentiment around the relevant stocks as we approach the May-June negotiating time-frame.”
Concerning big efforts of heavyweight digital/online video providers YouTube, Hulu, AOL, Facebook and others, that are creating their own version of upfront presentations, so-called “NewFronts," Wieser thinks this will be a “sideshow” to the main event. Online viewing, as a comparison to all TV viewing, equates to a low-single-digit percentage share.
That said, he notes U.S. online video growth will remain healthy in 2012, 22% higher to $2.3 billion.