Upfront revenue accounting in May should be taken with a grain of salt - or more like a shaker full. Upfront advertising deals in May aren't even orders - just commitments for advertisers to buy. Actual orders don't happen until just before the season starts. And then throughout the year (except for the fourth quarter), advertisers have the right to cut back on their upfront buys. Compounding this, advertisers then buy in-season, in the so-called scatter markets.
All of which means no one really knows how a network is really performing until the end of the year. Now researcher TNS Media Intelligence says over a stretch of 14 seasons that those upfront numbers differ by some $24.5 billion from the actual spend at year's end. That's about $1.75 billion per season that isn't accounted for in news stories. Not only that, but in four of those seasons, a strong upfront market didn't always predict a strong scatter market, according to TNS.
All of which suggests the press should perhaps wait to write advertising stories until right around August 31 - the actual end of the broadcast year. And, stories should be written with the same fervor that the upfront stories are written with in May.
Who knows? Maybe that billion or so dollars NBC dropped this upfront might be made up if they get a few hits this season. Look at ABC. Last year's upfront couldn't have predicted where ABC was headed. In the 2004 upfront its take was $1.5 billion; that jumped to $2 billion this past upfront period. ABC also bucked the overall industry trend - improving on its scatter pricing from that of its upfront pricing.
Then why write in May? It's because something happens - some activity between networks and media agencies. Paper is exchanged or rustled. Executives can be found whispering or yelling. The excitement builds, as this activity usually occurs in a rush of two or three days where $9 billion gets... committed.
That's high drama for TV business journalists.