Scatter Market Nears, But What About Revenues?

TV business axioms are made to be broken.  One such axiom: A weak upfront market is almost assuredly followed by a strong scatter market.

Some media executives believe this typical scenario is holding together -- with the thinnest of TV business threads.  Others believe a new wave is coming: Scatter may not bring much joy going forward in the long term. “I don’t think we’ll be in a market that will be gangbusters,” said Catherine Warburton, chief investment officer for Assembly.

Just look at the most recent wrinkle in the TV ad marketplace, something unheard of in recent memory (apart from the effects of the Great Recession): a cable upfront lower in overall dollars -- around 4-5% -- than the year before. Broadcast upfront dollars were also down, around 7%.

Network groups are counting on another axiom: Selling less inventory in the upfront means higher pricing for that inventory in the scatter market.

But market conditions might now be different. If scatter won’t be that hot, what will be? Will more dollars be scattered around mid-sized cable networks, video-on-demand platforms, full episode players, programmatic digital video or other premium digital video?



Looking to next season, think about the future of C7, which was an uneven affair in the just-completed upfront. Not all media agencies bought in to C7.

Why didn’t they do more C7 deals? Maybe those C7 CPMs were percentage points lower than comparable CPMs in C3.  Perhaps there was not much in the way of compromise as back in 2007 when the industry went to C3 from live program ratings.

Sellers might have been at a disadvantage concerning C7 deal since the market was weak.

Marketers shifting to C7 deals from C3 need to  create new price “bases,” which are hard to change and shake up down the line. Media agencies need to make sure there are significant long-term benefits working for their clients when new mathematics are in play.

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