• by Wayne Friedman , November 13, 2006

Fourth-quarter scatter pricing has perked up for TV networks--and that bullish feeling is carrying over into the beginnings of 2007.

For example, CBS will ask advertisers for a pricey 12% increase in CPM for its high-profile NCAA Tournament in March, say a number of media-buying executives. Cautiously, media buyers note this is just a starting negotiating point--deals may be struck at lower levels. A CBS rep didn't return messages by press time.

Although the sports marketplace operates separately from networks' prime time programming, media executives anticipate the nets will also ask for modest increases in first-quarter 2007 for prime-time entertainment shows--perhaps 5% or so above the upfront pricing.

In the fourth quarter, broadcast and especially cable networks garnered big CPM increases--as much as 20% from some specific niche cable networks increases. Other general-interest networks had more modest 5% to 10% gains in pricing.

But there might not be much overall revenue gains for any network since many, like Fox, sold higher levels of ad inventory in the upfront period. During News Corp.'s earnings call last week, Peter Chernin, president/COO of News Corp., described just such a scenario for Fox in the fourth quarter.

"This comes as no surprise--people held onto money in the upfront and spent it in scatter," says Gary Carr, senior vice president and director of national broadcast for TargetCast TCM. "It now looks as if the flat-to-negative upfront market was actually a tick or two higher."

This slight rise is giving networks hope that the scatter market for broadcast year 2006-2007 will finally break out of its three-year doldrums, where pricing was at the same levels--or a bit lower--than pricing in the upfront market.

"Inventory is tight," says Carr. "November is virtually sold out on cable and network." He even notes that cable networks are somewhat tighter in December--a month where they usually have plenty of commercial inventory.

As far as meeting upfront guarantees, it's been a mixed bag so far this season, say media buyers. ABC and CBS are fairly close to meeting their advertisers' obligations. But Fox and the CW are at the other end--faring the worst so far this season, some 15% to 20% below advertisers' promises. NBC has more modest ratings shortfalls.

Through the first week of the November sweeps, ABC is leading at a 4.3 rating/11 share, down 4% versus a year ago; CBS is down 11% to a 3.9/10; NBC is at the same level 3.9/10 but up 18% versus a year ago; Fox is off 13% to a 2.6/7; and the CW, in its first year as a network, is at a 1.5/4.