With just a week to go before broadcast television's upfront marketplace kicks off, media buyers and TV sales executives agree that the prime-time ad take will range between $8.8-9.0 billion, down 3-5 percent from last year's record $9.3 billion.
The estimated decline in ad dollars committed for next season is less than most agency and network executives had forecast earlier this year. There is still a belief on both sides, however, that cable, syndication and local television will take some dollars previously spent on the Big Six networks. Media agencies also are expected to hold back more dollars for scatter than they did last year, to take advantage of special-event opportunities next season and first-run programming in summer 2005.
"For the first time in my life, I am hearing an accurate [upfront] assessment by the broadcast networks,"said Lyle Schwartz, managing partner of research and marketplace analysis at Mediaedge:cia.
But while conceding that the networks' overall upfront dollars will drop, one broadcast network chief noted, "There's still a lot more money out there than advertisers are willing to admit. If there wasn't, the media buyers wouldn't be posturing so hard to get the networks to not open negotiations with double-digit CPM increases."
More so than in recent upfronts, the networks' programming presentations will be a major factor in determining where buyers spend their clients' dollars. In particular, ABC, The WB and Fox will have to wow buyers.
"Right now, there is very little reason to buy ABC unless they offer a low CPM [increase]," said Tim Spengler, evp and head of national broadcast at Initiative.
Steve Lanzano, evp and managing director at MPG, agreed that ABC will be a "wild card." He predicted that "it will be the most intently watched upfront by the buyers," adding, "I don't think it's at the top of any buyer's list." But if the prices are right, ABC could stay in the game, he said.
The WB "certainly won't be able to get the 20 percent CPM increases they got last year," noted Spengler. "Although there is a lot of goodwill toward The WB, and this season's ratings problems might have been just a one-year setback, we will have to walk out of their presentation believing in their new schedule."
Buyers predict that if The WB sets prices too high, it will lose some younger-targeted money to MTV and UPN. Buyers last week were impressed with MTV Networks' new MTVNcast package, which lets advertisers buy a group of spots that run simultaneously from 10-11 p.m. on MTV, VH1, Spike, Comedy Central and Nick at Nite to deliver a guaranteed cumulative 3.4 rating among adults 18-49.
"The WB could be in for a tough ride," said Larry Novenstern, svp and director of national buying at Deutsch. "MTV is going after its audience. MTVNcast could take some dollars away from The WB."
Fox will be taking the biggest gamble with its plan to roll out fresh programming year-round, starting with four new shows in June. Buyers give the network an even chance at a successful upfront. "If their strategy works," Lanzano said, "they'll be in real good shape."
Although its rates are 40 percent lower on average than The WB's, UPN is traditionally the last broadcast network to get buyer attention during the upfront. This time around, "if UPN does its schedule right, it will be more than an afterthought," Lanzano said. The network gave a strong pilot-development presentation, showcasing stars such as Vanessa Williams and Taye Diggs, and buyers said they are considering UPN in conjunction with the other networks, if only to lay some earlier money at lower CPM increases.
NBC, meanwhile, renewed only one show, Las Vegas, from last year's upfront and is losing flagship sitcoms Friends and Frasier. Buyers said the network could get hurt if it holds out for double-digit increases. "NBC clearly has some scheduling issues," said one media buyer. Another added, "NBC will take a step back from last year in regard to its CPMs."
CBS has said it will open its negotiations seeking double-digit increases, and will hold out if buyers are unwilling to do deals on its terms. CBS Television president and CEO Leslie Moonves has predicted CSI New York will be the hottest new show in the upfront and help drive the network's sales.
"CBS will close the gap between itself and NBC," said another buyer. "But it may take in less revenue in the upfront, because it will only do business on its own terms."