Predictions are starting to accelerate from Wall Street on how the upfront market will play out. The emerging consensus is a softer selling season for the Big Four networks, with volume up slightly
at best and pricing increasing in the mid single-digit range.
The broadcasters can’t be thrilled with the tepid forecasts, but there are all kinds of triggers to pull to impact either
figure -- ranging from holding back inventory to offering pricing discounts in exchange for higher spending. There’s one, though, networks seem particularly reluctant to pull: selling some of
the most valuable inventory, rather than keeping it for themselves.
Frequently, networks seem to reserve those last positions in a pod before a show returns for their own promos -- sometimes
running more than one house ad in a row. If the spots were always coveted – hmm, I’ve got to make a kitchen run, I probably have two minutes to get back – they’re worth more
now while waging an anti-DVR war.
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During time-shifted viewing, placing an ad in that last position would seem to improve the likelihood that at least part of it will be viewed at regular
speed. When fast-forwarding stops, a DVR backs up automactially. So, when people blazing through a pod at top speed see a show returning, there can be enough time after they hit stop for an ad to
convey a tagline, a movie opening date or a special offer (50% off at Macy’s all weekend!).
Networks may have already charged a premium for the last-spot inventory. But the opportunity
to do so with even more handsome returns seems ripe. Of course, the calculations of what’s the better move -- trying to build future viewership or taking guaranteed money -- could occupy the
smartest media researchers for who knows how long.
But for networks, it’s nice to have the potential stimulus in their back pockets. So, will this upfront bring a rainy day worth making
a big move selling that prime real estate?
On Friday, Barclays’ Anthony DiClemente weighed in forecasting a 0.5% bump in volume for the Big Four collectively to $9.2 billion, with CPMs
ranging from up 5% to 6.5%.
CBS would lead with a 6.5% increase, followed by ABC at 6%, Fox at 5.5% and NBC at 5%. Barclays predicts cable should land a 2% volume increase to $9.99
billion.
Discussions Pivotal Research’s Brian Wieser had with buyers and sellers yielded different perspectives (hardly a shocker). Buyers suggested volume could be down as much as 2%.
Sellers suggested total dollars would be up slightly.
Pivotal’s conclusion? Volume down 1%. Also, CBS would land CPM increases in the 7% range, which would top the market. The other
networks would slide in below with increases between 4% and 6%. Cable networks are likely to have similar increases in pricing.
RBC Capital Markets’ David Bank had previously predicted a
broadcast market with about a 2% volume drop, though cable would be up in the 4% to 5% range. Pricing could increase around 6%.
Even with a slower market, there seems to be enough to justify
remaining selfish with promo placement.