Been upfront so long it looks like down to me

For years now, ad buyers have grumbled about the prices set by television networks for the annual upfront sales in May, but nonetheless each year the upfront market has grown. Now, finally, what with YouTube and iTunes and so forth, will the chickens of the upfront come home to roost? THR thinks they just might. At a time when advertisers are shifting so much spending to the Web and to Internet-connected devices and platforms, there exists the promise of sure impact for the first time in this year's television upfront market. It's not a question of whether the Internet and other new media will begin to noticeably cut into conventional media spending but by how much. In fact, these new factors at work in the marketplace could contribute to the first indisputable decline (of about 2% by some estimates) from broadcast network television's $9 billion upfront ad spending in 2005. Even the cable networks were off by about $120 million from what they collectively expected to write in last year's upfront. The article is worth reading in its entirety, even if it stretches your math skills to the breaking point, as it did mine. Anyway, what to look for in the upfronts after the jump: Bernstein analyst Michael Nathanson's best-case estimate is that, based on a generous 4% increase in CPMs, Fox's 14% improvement in primetime ratings could translate into an 18% boost in upfront revenue to $1.6 billion, and ABC's 5% ratings gain could translate into a 9% boost to $2.1 billion. The improvement would allow the Fox TV network to move from a $143 million loss to break-even for the first time in six years, Nathanson said. So as long as shifts in existing upfront spending can have that kind of an impact, the broadcast networks aren't going to make any radical changes in the way they sell primetime advertising. However, the key issue becomes whether gains at Fox and ABC come directly out of losses for CBS and NBC, leaving the upfront market overall with flat or slightly declined growth. It is the potential inability to grow overall upfront ad spend that is at risk as advertisers continue to shift sizable dollar amounts to the Internet and other interactive media platforms.

Fishbowl

Been upfront so long it looks like down to me

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