Although it will be months before it breaks, there are already some signs that this year's upfront could occur much differently.
At the Media Summit earlier this week in New York City, Initiative Media's top buyer said he expected this year to be a moderate upfront.
Tim Spengler, executive vice president/director of national broadcast, said at this point, he didn't see the same types of dynamics that set up the records of the past two years coming into play. Among these are new product launches in automotive and pharmaceutical categories, as well as new movies hitting theaters.
"There are not enough indicators to tell whether it will be an especially strong or an especially weak upfront," Spengler said.
After a $9.2 billion take for the broadcast networks in the 2003-04 upfront-up 14 percent from 2002-03's record $8.1 billion-many advertisers were up in arms about CPM increases. Their frustration might have best been summed up by GM Advertising Chief C.J. Fraleigh, who last June told advertisers that it was an "absolute absurdity" to think big advertisers would continue to pay steep increases in the upfront with declining audiences.
"There are a lot of people out there looking for attractive alternatives," Fraleigh said.
David Verklin, president and chief executive officer of Carat USA, said Monday afternoon that he believed that the upfront would be flat or even down in volume and pricing.
"You've got a lot of angry advertisers" out there, Verklin said.
He pointed to the scatter market, which while still up slightly is nowhere near the level of double-digit increases that it had risen to in the months before the last two upfronts.
A more bullish prediction came from Mike Shaw, executive vice president of sales at ABC TV. Shaw's troops have been presenting to agencies in the past four weeks, with "Why Buy Network TV" at the top of the agenda. Shaw said he was looking for a good upfront this year, although he didn't make any specific predictions.
"We feel fine (about the upfront)," Shaw said. "We see no storm clouds out there."
At the same time, a famously soft scatter market seems to have firmed up in recent weeks.
ABC's Shaw said that while pricing for the scatter inventory hasn't been as high as in previous years--when it reached double digits in relation to the upfront--it's still higher than upfront.
ABC and CBS have no concerns about makegoods, either.
In a conference call Tuesday morning with analysts, Viacom President Mel Karmazin said that scatter pricing at CBS and UPN is above upfront levels, although he didn't say how much. Option levels for the first and second quarters are at normal levels, Karmazin said. And because of strong ratings at the network, CBS won't be giving out any makegoods, either.
"We have no ADU [added deficiency units] issues, so we will have all of the ad inventory available for sale," Karmazin said. "None of it will be used for ADUs."
At Viacom's cable networks--which include Comedy Central, MTV, and Nickelodeon--Karmazin said scatter pricing was also stronger in the current quarter than the fourth quarter, with less than 3 percent of the options being exercised.
In a separate but related matter, MTV Networks President Mark Rosenthal told the MediaDailyNews that the combined upfront would again be held this year.
Last May, MTV Networks held a star-studded, raucous upfront at Madison Square Garden that brought Farrah Fawcett, Elton John, and Kid Rock together with dozens of other stars to pitch planners and buyers about the value of MTV Networks. It was the first time the MTV Networks had brought all of their adult-themed networks--including MTV, VH1, CMT, TVLand, Nick at Nite, and the newly renamed Spike TV--together in one upfront presentation.
When asked what would be on the agenda this year, Rosenthal demurred.
"It's a surprise," he said.