The 2013-14 Upfront

Bad Moon Rising: Unfavorable Indicators Dog Broadcasters

Signs point to a lukewarm upfront marketplace

Although clients’ budgets won’t be registered for another two months or so, analysts and media buyers are already saying that the 2013-14 upfront marketplace won’t be particularly memorable.

In a note to investors, Credit Suisse research analyst Michael Senno predicted that a “stable, but tepid” scatter market is likely to presage a flat spring bazaar for broadcasters, while top-tier cable networks may see dollar volume improve by around 2 percent to 4 percent versus the year-ago period.

Senno said he believes that CPM inflation will continue to cool off in this year’s selling season. The general feeling of malaise can be chalked up to a sluggish macroeconomic economy, ratings declines and a perceived shift to digital from linear TV.

Having surveyed a sample of media buyers, Senno said the view from the agency side of the desk suggests that this year’s upfront could be a carbon copy of the 2012-13 sell-off. Last year, ABC, CBS and Fox were flat, while NBC increased volume by 3 percent. All told, the Big Four broadcasters booked $9.25 billion in advance prime time commitments, marking an infinitesimal 1 percent gain versus the previous year’s $9.15 billion.

Cable was in far better form, raking in a record $9.8 billion, per the Cabletelevision Advertising Bureau. That said, the total haul represented a 5 percent increase versus the 2011-12 bazaar, during which cable soared 16 percent to $9.29 billion. 

“Early indications are that [this year’s] TV upfront could follow last year’s trend of slowing growth,” Senno said, adding that any gains are likely to be chalked up by the cable nets. Still, even a slight improvement over last year’s tally will represent a record; after all, the negligible gains of last year’s bazaar put broadcast over the top.

With year-over-year scatter up just a few ticks, the nets aren’t exactly heading into the upfront with a brisk wind in their sails. Buyers predict CBS in 2013 will lead all comers with 5 percent CPM growth and a 3 percent increase in dollar volume, which would bring its overall upfront haul to $2.73 billion.

Both ABC and Fox are expected to inch forward by 2 percent, with the former projected to take in some $2.55 billion in advance commitments and the latter, around $2.25 billion. NBC is likely to bring up the rear, improving 1 percent to around $1.8 billion.

Overall, broadcast is expected to suffer further deceleration in pricing. Senno foresees the Big Four averaging CPM increases of 3.8 percent; a year ago, rates climbed around 7.3 percent.

On the cable front, a 4 percent hike in CPMs and volume would lead to a record take of $10.3 billion. Again, deceleration is the watchword, as this represents a significant shift compared to last year’s 16 percent increase. All told, the TV market could patch together 4 percent more business than it did a year ago, with overall upfront sales at the Big Four and cable adding up to around $19.8 billion.

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