Surviving tough times for many in the broadcast upfront business means maintaining an even keel. So far in this upfront, that's what the major broadcasters are focusing on. The “even” goals are the overall upfront dollar volumes generated by each network. Current reports put CBS at around $2.6 billion; Fox at around $2.0 billion and CW at around $400 million – all about where they were a year ago. ABC and NBC are left to be decided.
But, when all is said and done, the math may not work. Many analysts had predicted a total broadcast network decline of perhaps 3%-4% in overall upfront dollars from around $9.2 billion a year ago. This was based on selling around the same level of inventory -- 75% or so on average. (Cable networks are estimated to climb around the same 3%-4%, but not all of them, especially not the most established ones).
The key reason for the cutback? If gross rating points are down 10% or more and networks are only getting 7% gains at best in CPMs, then the broadcasters will be behind.
Of course, there is the scatter market to consider. And, increasingly, additional digital ad revenues can be derived from new platforms. One media executive, for example, estimated that ABC will get $120 million a year from its full-episode player, almost double last year’s $60 million to $80 million.
This season ABC has made a case to sell under the ABC Unified plan featuring package deals and one audience guarantee for a single program -- no matter what platforms or devices (TV, digital and mobile). ABC, which got $2.4 billion in upfront dollars a year ago, seems to be deep into deal making.
NBC is further behind. A year ago, NBC was at $1.8 billion after concluding its upfront negotiations. NBC's strategy continues to be controversial – it’s aggressive with big upfront advertisers, pushing them to make big package deals among all its broadcast and cable networks.
Not only that, but some believe NBC is looking to upset the cart with new dollar-“based” advertiser levels from which annual increases are typically tacked on for its biggest cable network, USA.
NBCUniversal hopes USA’s reruns of “Modern Family, which will air a massive 16 hours a week, will spike up ratings, especially young viewers. NBCU executives want high prices for “Family” comparable to reruns of “Big Bang Theory” on TBS. “Bang” has been key to rising overall ratings for the Turner cable network.
Some media-buying executives believe there could be big opportunity for certain advertisers to set a new pricing situation covering many NBCU networks.
But media analysts predict that some advertisers might shift budgets to other networks. From NBC's point of view, the temptation of strong cable viewership from a proven hit in “Modern Family” -- as well as more stability on the NBC network mother ship, with shows like “The Voice,” “Sunday Night Football” and “Revolution” -- will make them think otherwise.
More than others, NBC figures all this will make its networks better than “even.”