• by Wayne Friedman , David Goetzl  @dgoetzl, June 9, 2006

TV's upfront market moved glacially again yesterday, but with some added twists, according to media agency executives.

OMD has done an agency deal with NBC, said a number of media buying and selling executives. Pricing isn't fully known, but many executives assumed the deal was done at lower CPM pricing versus a year ago. One buying side executive said that NBC began negotiations by asking for flat CPMs--an indicator it was prepared to accept rollbacks. OMD could have offered NBC a volume increase in exchange for significant pricing relief.

Some media executives estimate that NBC could roll back pricing by 6 percent or so this upfront season. An NBC representative would not comment. A call to OMD was not immediately returned. The NBC deal comes after OMD and MTV Networks announced a sprawling upfront deal covering multiple networks and multiple digital platforms.

Separately, Fox continues to move--slowly making some deals, as does CBS. Fox seemingly has been posting better price increases than CBS--which, media executives say, puts them in somewhat of a lead position in terms of the upfront market.

"Fox swears it is getting at least 2 percent cost-per-thousand viewer (CPM) price increases," said a veteran New York media sales executives. "CBS is doing deals--but no one has figured out at what price. The longer the market takes to get going, the stronger Fox's position is."

A Fox representative did not immediately respond to a call or an e-mail seeking comment. A CBS spokeman had no comment.

Elsewhere, the CW's first-ever upfront continues with deals being struck at CPM levels comparable to one of its predecessor networks, The WB (which is merging with UPN to form CW). CPM levels are believed to be in the high-20-dollar to low-30-dollar range for the network's target 18-to-34 viewers. A CW representative had no comment.

The uncertainty and slowness of this upfront has made it hard for industry observers to get a good read on activity. With numbers and estimates tossed around--and revised daily--now media buyers and sellers estimate that maybe 10 percent of upfront dollars have been laid down so far. Few executives believe there is much momentum yet.

"There is not the pent-up demand going into the upfront--and not the sense of urgency," said Steve Grubbs, CEO of PHD North America. "If all four networks have a lower-than-expected price point, the more likely you'll see a strong scatter market. It's been three years that scatter hasn't been strong. If people aren't penalized for buying scatter, that dilutes the great benefit of the upfront."

Total upfront advertising volume in the market could be down considerably from its $8.9 billion perch of a year ago--forcing networks to scramble, perhaps by writing deals with negative CPMs.

ABC is still the wild card; it hasn't as yet done any deals, according to media buying executives. The longer it waits, the longer media buyers believe it will have a tough time getting the 5 percent to 7 percent CPM increases it says it wants and has earned. An ABC representative didn't immediately return a call for comment.

Other executives--even sellers at competing networks--say ABC is deserving of some price gains. With its improved ratings versus a year ago, coupled with lower pricing on 18-to-49 CPMs compared to NBC, CBS and Fox, ABC has a strong upside in the marketplace.

"They do have some momentum, but I don't think there's anything on the schedule that's just stellar as far as new programming (from this past season) goes," said one buying executive.

Fox believes it is ABC's equal: Not only does it have strong shows in the 18-to-49 demo such as "American Idol," "24," "House," and "Prison Break," but it has a still-solid Sunday night comedy block that attracts 18-to-34 viewers and correspondingly robust ad revenue.

If Fox ends up being the CPM leader with increases in the 2 percent range, that would portend trouble for cable networks--especially those that also focus on 18-to-49 viewers--as they gear up for their upfront.

"How will TNT, TBS, or USA possibly get more than flat, when Fox is at 2 percent?," asked one veteran media buying executive.

Should the upfront continue at this pace--with Fox getting the increases it has been telling media buyers it is commanding--a new market dynamic will emerge: Fox will leap over NBC as the highest-priced network in terms of 18-to-49 CPMs--at a level near or above the $30 range.

CBS appears determined to extract CPM increases, but buyers look to be equally opposed. The network gets credit for stability and has some promising new dramas for next season in "Shark" and "Smith," but 18-to-49 ratings in regularly scheduled programming dropped 5 percent this season. CBS' 25-to-54 ratings--an important demo for the older-skewing network--were flat, although the network is still the runaway leader in the category. Thursday night ratings were also off, down 8 percent in the 18-to-49 demo.