Good News For Marketers: Small TV Pricing Hikes. Bad News? Soft Ratings
A stable TV market will offer up modest price gains for major TV broadcasters this upfront season. Michael Senno, media analyst for Credit Suisse, estimates the cost per thousand viewer prices (CPMs) to rise by "modest low to mid-single digits" during the coming upfront marketplace. Look for CBS to see 5% gains on CPMs; Fox and cable networks, 4% higher; NBC and ABC, 3% more, and syndication, an 2% addition.
In terms of total ad volume sold, he says, it looks to be "flat to slightly higher," following last year’s slight TV volume hike. For the upfront 2013, it's expected TV broadcasters will be up a "modest” 3%; cable will take in 4%, and syndication will be flat.
The 2012 upfront TV revenue estimates are that cable networks pulled in a collective $9.7 billion during the 2012-13 upfront, with broadcast networks at $9.4 billion, and syndication at $3 billion. CBS was at $2.7 billion; ABC, $2.5 billion; Fox hit $2 billion in upfront sales; NBC, $1.8 billion; and CW landed at some $420 million.
Ad sales will “remain weak” into 2014 because softer ratings -- not just for broadcast, but cable as well -- will lower CPM inflation, according to Senno.
Still, TV seems fearless. Indications are that despite everything the big media player will continue to take advertising money away from print.
Though not as strongly as in previous years, TV executives may be breathing a sigh of relief -- especially since they’ve been dealing with trends like more time-shifting TV viewing, growing subscription video on demand usage, and fragmented entertainment consumers.
These trends are also why TV networks are pushing for C3 ratings (live commercial ratings plus three days of time shifted viewing) to be extended to C7 – which would mean a 1% to possibly a 3% gain in viewership.
Certainly not this year. But possibly next year, TV networks executives figure this 1% to 3% gain should be translated into real advertising dollars. Adding a couple of percentage points to an already expected modest 3% hike for the $22 billion upfront TV marketplace would do quite nicely.
WAYNE FRIEDMAN
Wayne Friedman is West Coast Editor of MediaPost.
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