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HOME • MANAGE SUBSCRIPTIONS • MEDIA KIT
ABC Wraps Up Ad Sales, Broadcast Upfront Total Reaches $9 Billion
by Wayne Friedman and David Goetzl, Thursday, July 6, 2006, 8:45 AM

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ABC has concluded its prime-time upfront sales activity to the tune of $2.3 billion, and the entire broadcast upfront market's labored four-week journey is finally drawing to a close, with the total market hitting overall revenue levels similar to a year ago--about $9 billion, according to the broadcast networks' estimates.

Final totals look like this: ABC, $2.3 billion; CBS, $2.3 billion; NBC, $1.9 billion; Fox, $1.8 billion; The CW, $650 million. My Network TV, which isn't quite finished, according to executives, is expected to pull in $50 million. A My Network TV spokeswoman didn't return phone calls by press time.

But media buying executives insist that some of these numbers are too high--with one media agency executive maintaining that as much as $600 million is sitting on the sidelines or designated for digital advertising. Concerning the latter, Mike Shaw, president of advertising sales of ABC Television Network, said that this wasn't the case.

"Very little went to digital," said Shaw. "For example, we didn't sell our broadband or VOD in the upfront. We haven't, as yet, figured out the metrics in how to sell MyABC."

Shaw added, however, that certain ABC.com and ABCNews.com Internet extensions were included in upfront deals. For its own part, NBC has said that it grabbed $50 million in new digital advertising money.

MyABC, which will be sold on a scatter basis, is the network's initiative to offer full episodes of hit shows on-demand on ABC.com. ABC has just completed a two-month trial with shows such as "Lost" and "Desperate Housewives," and is evaluating advertising and programming models.

Regardless of its conclusions, Shaw said a batch of new shows will be available on the site when the new season launches, if not before. However, he said the network would not follow NBC's example of premiering shows on its Web site--a move that has angered affiliates who feel their ratings and revenues are hurt by the alternate distribution. "Nothing will premiere online," Shaw said. "Our affiliates are going to get it first."

Overall in the upfront, ABC says it booked $3 billion for all its dayparts--selling 75 percent to 80 percent of its prime-time inventory, down from the 78 percent to 83 percent of a year ago. Media buyers say ABC got anywhere from 2 percent to 3 percent price increases on the cost-per-thousand viewers (CPM). This was similar to what Fox received--but much lower than ABC's pre-upfront wishful increases in the 5 percent to 6 percent range.

ABC benefited from the bold move to shift "Grey's Anatomy" to Thursdays, and was able to leverage its three tent pole programs--"Desperate Housewives," "Lost," and "Grey's"--to pump prime-time sales. The interest in the three boffo hits may have offset buyers' wariness about the fate of the slew of new shows ABC is introducing this fall.

As opposed to quick two- or three-day upfront markets of years ago, ABC--as well as CBS and others--needed several weeks to complete their upfront activities. Primarily, this was to hit their overall revenue goals.

Secondarily, this was to build a foundation for a healthy scatter market, since less prime-time inventory typically means potentially higher prices. The fourth-quarter scatter market starts up in a few weeks. Last season, ABC--as opposed to other networks--says it witnessed scatter increases of 10 percent or more.

This wasn't the case for the broadcast networks business as a whole. "For a variety of reasons, there wasn't the penalty for buying in the scatter market versus the upfront for the last two years," said Shaw. "You haven't been burned by buying scatter."

While he admitted that prime time took a hit in terms of cost per thousand viewers pricing (CPM), Shaw added: "We weren't down in other dayparts--morning, news, and daytime. Late night was down a little."

He said Charlie Gibson's recent success on "World News Tonight" and Rosie O'Donnell's joining the daytime talk show "The View" drew buyer interest.

Shaw took issue with the fact that ABC's somewhat delayed start hurt the network going into the upfront season. "It may have slowed us down slightly," he said. "It sure as hell didn't speed things up. But I can tell you it didn't affect one dollar, one budget from what we are looking at before the upfront began."

ABC was at the forefront of the live plus DVR viewing issue, pushing marketers to consider paying more for DVR viewing. It abandoned that issue just after the upfront market was beginning to move, when Fox and CBS began making early deals.

To those who were confused about the issue, Shaw says that ABC never intended to get paid for those commercials not viewed. He said: "We didn't want to get paid for DVR playback if the commercials were skipped. That wasn't our intent, nor would it ever have been. We just believed--and still philosophically do to this day--that the value is something other than zero."

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