Network

Despite a laundry list of potentially negative influences, the broadcast networks this upfront season have bested themselves yet again, raking in an eye-popping $9.23 billion, just north of last year's take -- thus, all the media attention that's been heaped on this year's negotiations.

But what was largely overlooked in that coverage was the strength of the nets in dayparts outside prime time, which, with the exception of evening news, all turned in year-over-year growth in dollar volume. In fact, late night -- a stagnant daypart for many years-this year upped its upfront take versus last year. And daytime, steadily losing ratings for the past decade, enjoyed cost-per-thousand rate increases that were on par with prime.

Clearly, despite ratings shortfalls, broadcast television remains a hot vehicle for national advertisers -- and that strength leaves many media agency executives with their heads in their hands over the price hikes they were forced to pay.

Simply put, there was so much money in the marketplace that agencies had very little leverage to negotiate -- and the networks, once again, found themselves in the driver's seat.

ABC hammered out the first big prime-time deals (with agencies GroupM and Starcom), establishing rich ad-rate hikes of some 9 percent.
 
ABC sales president Mike Shaw says advertiser interest in his network's prime-time offerings spans several nights of the week. The fact that the net was the highest rated in adults 18-49 before the crippling Writers Guild of America strike last fall was a strong selling point, Shaw adds, with returning shows making up most of ABC's new schedule.

Established ratings winners such as Grey's Anatomy, Desperate Housewives, Extreme Makeover: Home Edition and Dancing With the Stars continued to lure advertiser interest this year, as did the Wednesday night block of dramas Pushing Daisies, Private Practice and Dirty Sexy Money. (ABC took the unusual step last fall of launching those three freshman shows on the same night, resulting in ratings success and a return to the formula this year.)

Always in demand due to its powerhouse American Idol franchise, Fox also did well this year with series including House, Bones, Prison Break and 24, as well as its veteran Sunday animation block and new dramas Fringe and The Dollhouse. Around the two new shows, Fox will introduce the concept Remote Free TV, airing fewer ads and shortening commercial pods. To do business in those shows, advertisers ponied up a premium of between 35 percent and 40 percent.

CBS drew solid advertiser interest in returning procedural dramas CSI, CSI: Miami and CSI:NY, Criminal Minds and NCIS, as well as newcomer The Mentalist, which will air on Tuesday nights at 9, leading out of NCIS. Many buyers believe The Mentalist has promise. Its star, Simon Baker, had a moderately successful run with CBS' The Guardian, and the new show is in the net's wheelhouse.

Meanwhile, NBC took in $100 million more in prime-time dollars this upfront than last year, with many buyers citing the net's still desirable, high-income audience -- and the fact that NBC, once the highest priced network, has dropped its prices considerably.

Even ratings-challenged The CW enjoyed a relatively fruitful upfront this time around, with certain retailers, movie studios, wireless providers, and health and beauty marketers making a play for the network's young female target audience.

Pharmaceuticals was a growth ad category for all the broadcast networks this year, with several drug makers boosting their ad budgets significantly and branching out in all dayparts -- among them, late night.

The upstart MyNetworkTV also snagged CPM increases between 9 percent and 11 percent, albeit off a lower base.

While most networks had wrapped up negotiations by June 13, MNTV was only about halfway done as of last Friday (June 20).

MNTV's newly acquired WWE: Smackdown proved an advertiser draw, with MNTV packaging the wrestling property with other prime-time shows. The network's new sketch comedy starring Tony Rock, brother of comedian Chris Rock, also attracted some buyer interest. --John Consoli



Cable

The patient is still alive on the table, so it's a bit premature to start in with the postmortem. But with much of the high-end business having closed as of late last week, it's safe to say that the 2008 cable upfront will go on the books as one of the healthiest in recent memory.

Even the most bullish ad sales executives say they're pleasantly surprised by how much money they've raked in over the last few weeks, as early predictions of cost-per-thousand bumps and volume boosts were pallid compared to actual gains the top-tier networks were able to secure. "Going into this thing, I would have said that cable CPMs on average would be up no more than five percent," says one sales boss who declined to speak for attribution. "In many cases, we nearly doubled that."

As far back as February, Turner executives were practically bouncing on the balls of their feet, so eager were they to get into a market they saw as a sure-fire windfall. "Clients need to really accept that we've moved into the broadcast neighborhood and that we're there to stay," Linda Yaccarino, evp and general manager for Turner Entertainment Sales and Marketing, said at the time.

Then, Yaccarino bristled at the inflated CPMs broadcast commands in a time of underdelivery, and at the subsequent makegoods that come with withering prime-time ratings. She went on to predict that there would be "a resetting of priorities and pricing," adding that Turner would be particularly aggressive in positioning itself as an alternative to broadcast. So bullish was the network group, which includes beachfront real estate in TNT and TBS, that it crashed the broadcast party this year, scheduling its upfront pitch in the middle of the week traditionally devoted to the network dog-and-pony shows.

While macroeconomic indicators are bleak and getting bleaker, Turner's exuberance served it well. Once broadcast closed, Turner's ad sales chief David Levy locked in price increases of 9 percent to 10 percent and boosted dollar volume as much as 25 percent, setting the bar for cable and validating its brazen gate-crashing maneuver.

When Turner went public with its plan to bum rush the broadcast upfront, media buyers dismissed it as mere saber rattling. They were wrong. But give credit where it's due: The gambit did find support from one major buyer. In March, Donna Speciale, president of investment and activation at MediaVest, called it "a brilliant move."

At the close of last week, Turner, Lifetime Networks and Comcast Networks were closed, and while MTV Networks had done a lot of early business, it still had to close with one last big agency.

NBC Universal's cable group also hadn't turned the corner, having seen some push back on CPM increases. As was the case with Turner, NBCU was able to secure volume increases near 25 percent, while averaging comparable CPM increases.

Comcast was said to have rolled up volume increases in excess of 20 percent, while targeting a 7 percent CPM lift. Meanwhile, Lifetime evp, ad sales Debbie Richman said she was able to write "20 percent more volume while averaging CPM increases of 9 [percent] to 10 percent."

Richman -- who took a seat at the seller's side of the table this year, joining Lifetime on April 1 after a decade at OMD -- said a relatively tiny amount of her upfront dollars were moving from scatter. Lifetime's strong showing, she says, was the result of a confluence of factors. "They clearly saw a value there, whether it was Army Wives or Project Runway or just the fact that we are the most targeted network for reaching women," she says. "We hit it out of the park on all levels."

Discovery Networks approached the end of last week with about 70 percent of business locked down, and a back-of-the-envelope reckoning suggests the conglomerate could stoke its upfront take by as much as $100 million versus last year.

Observers now predict high-end cable nets will have notched CPM increases of 7 percent, with the 76 measured ad-supported networks combined pumping overall dollar increases between 8 percent and 10 percent. Barring some blowback on the lower end (third-tier nets could be in for a pricing squeeze once they make it to the table, given clients' need for efficiencies), cable could take in anywhere from $550-700 million more than last year, bringing the final upfront tally to nearly $7.7 billion. (The Cabletelevision Advertising Bureau eyeballs the 2007 cable upfront at a clean $7 billion.)

All of which is very good news for cable, although gas prices, the housing debacle and a generalized apocalyptic smell in the air has some sales bosses wondering if this may be the last they see of a bull market for some time.

"It looks really bad out there, and we might see a lot of panic in the fourth quarter," says one sales chief. "There could be an awful lot of people waking up in 2009 with buyer's remorse."

Grim forecasts aside, the primary lesson of this year's bazaar is more heartening. "TV works," says one media buyer. "The upfront works. Anyone who says different doesn't know what the [heck] they're talking about." --Anthony Crupi



Syndication

The strength of the syndicated TV upfront marketplace took media buyers by surprise as much as the broadcast market. Just two days before syndication started to move, one media agency executive predicted, "There's no way syndication is going to get the kind of increases broadcast got."

While some agencies initially balked, deals began to get done at cost-per-thousand increases of as high as 9 percent -- rivaling the top hikes the broadcast networks got and establishing pricing. As a result, the syndication upfront is expected to reach about $2.4 billion, up about 4.3 percent over last year.

"There was some disbelief that they had to pay such high increases," says one sales exec. "But the negotiations were entirely professional -- there were no harsh words."

What drove syndication business was a strong demand for daytime inventory. Earlier, the broadcast networks snagged high single-digit price increases for daytime inventory -- despite big ratings declines among soap operas, because those ratings shortfalls meant they had fewer rating points to sell in the upfront. Tighter inventory led to higher prices.

But the situation also meant advertisers left some money on the table they needed to place, and many turned to daytime syndication.

Unlike the ratings-challenged soaps, daytime syndication boasts several solid talkers and game shows reaching women 18-34 and 18-49. While some syndicated fare boasts a heftier price tag, syndicators report strong interest across several ad categories, especially in talk shows. Traditional ratings powerhouses like CBS Television Distribution's The Oprah Winfrey Show and Dr. Phil and Warner Bros. Domestic Television Distribution's The Ellen Degeneres Show -- along with Warner Bros. newcomer The Bonnie Hunt Show -- received solid dollar volume and fat rates. Twentieth Television's The Morning Show With Mike and Juliet also got strong interest among buyers.

A dearth of successful network sitcoms had buyers clamoring for off-network comedies. As one sales exec says, "The broadcast networks run their most successful sitcoms one night a week. In syndication, an advertiser can buy them five or six nights a week."

Warner Bros.' Two and a Half Men and Twentieth Television's Family Guy attracted strong buyer interest and solid CPM gains in the 8 percent to 9 percent range.

Among off-network syndicated dramas, NBC Universal Domestic Television Distribution's House, available in syndication for the first time this year, drew promising buyer interest and solid pricing.

Among syndicated game shows, perennial players including CBS Television Distribution's Wheel of Fortune and Jeopardy, along with NBCU's new half-hour version of Deal or No Deal and Twentieth Television's Trivial Pursuit, all did well attracting advertiser dollars. Celebrity newsmagazine shows like Warner Bros.' TMZ, CBS Television Distribution's Entertainment Tonight and NBC Universal's Access Hollywood all pulled in CPM hikes in the high single digits.

Another category stronger than previous years for syndicators was the ethnic sitcom -- a genre that's almost disappeared from the broadcast prime-time schedules.

Warner Bros.' George Lopez and The Wayans Brothers sold well, while Twentieth Television drummed up considerable interest in Tyler Perry's House of Payne, an off-net TNT show offered in syndication for the first time.

Also picking up interest among buyers was Disney-ABC Domestic Television's Wizard's First Rule, a weekly, hour-long action/fantasy series expected to draw a following among teens and young adults.

Just about every major syndicator said they took in more dollar volume this year than last -- due, much like the broadcast networks, to so many advertisers moving dollars spent in the scatter market last year back into the upfront this time around.

Says one syndication sales executive, echoing many of his fellow syndicators, "We lost a few clients, but many new ones came in to offset that. And demand by almost all of our clients was up from last year." --J.C.  

John Consoli is a senior editor covering network TV, and Anthony Crupi is a senior editor covering cable at Mediaweek.