Upfront Marketplace Could Return Low Single-Digit Growth

Somewhat echoing what senior TV and media executives have been saying during recent financial earnings phone calls, one veteran media analyst believes the advertising upfront deal-making will be a decent -- but perhaps not great -- market.

For the upfront advertising market, Brian Wieser, senior research analyst for Pivotal Research Group, says “national TV could see low single-digit volume growth, and high-single digit pricing.”

This would be a turnaround from the marketplace of a year ago, when TV upfront estimates were that volume contracted versus the previous year.

Broadcast networks prime time was down 3.7% to $8.36 billion, and cable networks sank 2.3% to $9.45 billion, according to Media Dynamics. On average, broadcast networks prime time got pricing at the low-single digit range -- 4%; cable network were a bit better, improving 4.4%.



Recently, senior TV executives have been much more enthusiastic -- talking up strong high double-digit 15% to 18% pricing increases in current scatter market activity over upfront prices set last summer.

For many, strong late first- and second-quarter scatter markets have been a harbinger in years past of strong upfront markets to follow in the late spring/early summer period.

Wieser notes that overall TV in the fourth quarter of 2015 was up 6% to 7%, “defying the notion the sector faced permanent secular decline.”

Still, he worries -- as do other economic and financial analysts -- that there is a risk of a U.S. recession in the latter part of the year.

“Conditions could turn negative as the year proceeds,” he writes “However, even if there were a recession-driven downturn in advertising and television, a return to growth would still eventually occur for TV because of the factors driving a rebound at the present time.”

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