If past upfronts have been characterized by a good deal of prefatory chest thumping, with sellers crowing about the prices they deserve and buyers countering with curt dismissals, the early talk around this year’s marketplace is practically genteel. For those who’ve had a front seat to some of the more contentious bazaars, it’s as if a bar brawl has given way to a quilting bee.
As tends to be the case in advance of a “normalized” market, network ad sales execs and TV buyers seem to agree on many of the fundamentals. The consensus view has overall dollar volume ranging from flat-to-up 5 percent. If that projection holds true, the broadcast and cable nets will book between $18.5 billion and $19.4 billion in advance commitments.
According to Pivotal Research Group senior research analyst Brian Wieser, the networks will push for CPM increases between 8 percent and 10 percent. “CBS should command rates at the high end of that range, while everyone else will come in a few points lower,” Wieser said. “Buyers will complain that broadcast’s price increases are too high, but there’s no getting around how network TV is the most efficient way for marketers to secure reach, frequency and GRPs.”
While buyers say they paid too much in the supercharged 2011-12 upfront market, the costs were all but inevitable, given the dizzying premiums the networks were nailing down in scatter.
“Last year, there was no question that the upfront was going to be a blockbuster,” said one ad sales boss. “Scatter was up 30, 35, 40 percent in the first and second quarter and so you could name your price. Now, with scatter up just a few points [versus last year’s upfront rates], we’re not going to have the benefit of those tailwinds.”
To some extent, the ongoing NewFronts circus may have tempered some of the usual pre-upfront rhetoric. And while the higher level of noise in the system may have drowned out any buyer-seller posturing, the NewFronts sideshow is unlikely to have a material impact on the TV marketplace. “There’s no inventory!” Wieser said. “Supply is extremely limited, and much of what is available isn’t worth locking up ahead of time.”
That said, should the TV market stall out, YouTube, Hulu, et al could make a play for incremental dollars. “Online video offers a certain kind of analytical leverage,” said TargetCast tcm CEO Steve Farella. “If we were to get hung up with one of the networks, we’d do a deal with an online video publisher in an instant.”
In the meantime, sellers anticipate a drama-free upfront. “We jaw back and forth about price, but so much of our business is repeat business,” said one cable sales chief. “It’d be pretty short-sighted for us to get into a blood-on-the-walls situation.”