Upfront Revenues: Slightly Up For Broadcast, Down For Cable

Broadcast networks will only see a 2% rise in overall upfront revenues this season -- with many cable networks witnessing lower revenues versus a year ago, according one media analyst estimate.

Todd Juenger, senior media analyst at Bernstein Research, writes that even high network 10% cost per thousand [CPM] viewer price gains for this coming upfront market will not translate into a “strong” ad upfront:

“We lay out a indexed pro forma that depicts a scenario that, despite double-digit upfront CPM increases, it would only translate into 2% gain primetime ad revenue for an ‘average’ broadcast network, and a 6% [decline] for an "average" cable network.”

All this stems from overall lower audience viewing -- especially in broadcast prime time, which he says are running at low-double-digit percentages declines right now.



Juenger determines that harder-to-maintain “audience guarantees” will be the reason -- what networks promise to advertisers for upfront deals before the season starts. He says last year’s upfront guarantees were too high -- by 5%.

“We are modeling audience guarantees to be down 10% (compared to last year’s upfront),” he says. “Given that prime-time entertainment audiences tended to be down high-singles, low-double [percentages] throughout the year, the actual under-delivery was probably more than 5%.”

Juenger says cable networks are poised to do less because they tend to sell much less upfront and more in scatter -- with projections of a much softer scatter market to come.

Media Dynamics estimated broadcast networks pulled in around $8.4 billion in upfront advertising dollars for the 2015-2016 TV season -- down 4% from a year ago -- with cable networks $9.5 billion, down 2% from the previous upfront period.

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