Even with continued viewer erosion, there is newfound TV network optimism.
This past TV season, 2015-2016, has seen C3 ratings (commercial ratings plus three days of time-shifting) among 18-49 viewers -- still a key measure -- declining around 7%, this after a 8% drop from the season before.
This decline is now three decades in the making; media-buying executives will remind you of this.
No matter. Against lackluster TV upfront revenues of the past two years, projections are that costs per thousand viewer [CPMs] will see higher gains versus that of a year ago, with mid-to-high 4% to 7% single-digit percentage increases. Total upfront volume also looks to be higher -- perhaps by 3% for both broadcast and cable -- versus declines in the upfront market a year ago.
And, after a few years of being mum in offering specific price projections increases, Les Moonves, chairman/chief executive officer of CBS Corp., returns to an on-the-record verbal sales proclamation, confirming, when asked recently by a media analyst, that the network could gain double-digit percentage price increases.
Why did Moonves decide to change course? A soaring scatter market says a lot -- this after few ho-hum scatter markets. Now Moonves says about the upfront, CBS is “salivating” about possibilities.
Networks claims the age-old “scarcity” issue is still a factor, with the relatively high viewership of TV programs — versus cable and even new digital media competitors — showing increases are warranted.
By contrast, media buyers are saying when looking at the whole picture -- last year’s upfront and the current improved scatter market -- things should be somewhat more modest than TV sellers would tell you. Upfront dollars held back just moved to the scatter market throughout the year, offering a view of somewhat artificial current strength.
Now, to be fair, this media buyers’ upfront-scatter theory has been around for years as well.
All this means is that we are right back to where we have been for the last three decades, from both the media seller’s and buyer’s point of view.
At the end of the day, there never seems to be massive disruptive change in the traditional TV upfront market -- just some slow leakage. Follow that if you like. Better to have patience in analyzing this slow-moving, big-screen advertising picture.
If the sctatter market were transparent, there would be no scarcity.