While the Nielsen ratings for the first two weeks of the new broadcast season likely left a few network executives scrambling to get their Xanax refilled, the advertising marketplace itself appears to be holding up. But analysts are concerned that a soft fourth-quarter scatter market and the general lack of enthusiasm for freshman shows could augur a long, cold winter.
First, the good news. Analysts put this year’s upfront haul in the neighborhood of $9.2 billion to $9.5 billion, and according to media buyers, most of that pledged money has stuck. With the process of converting upfront holds into orders now complete, the consensus puts breakage at 2 to 3 percent of overall volume, a figure that’s consistent with historical levels.
RBC Capital Markets analyst David Bank said he believes that no more than 15 to 20 of the 300 total advertisers who signed on for prime-time broadcast inventory have pulled out of their commitments.
“That can be seen as a relatively positive sign for our original estimates [on volume],” he said, adding that some client cancellations are likely partial rather than total. “I would err on the conservative side of that estimate,” he added.
That’s all well and good, but there is a flip side to the breakage numbers. While many clients attempt to throw more money into their initial upfront outlay in order to get the most out of negotiated rates, that hasn’t happened this year.
“With scatter the way it is, there’s not much of an advantage to adding to your order,” said one TV buyer. “There’s also little urgency [in the market]; the clients really don’t have much cause to be enthusiastic about any of the new shows.”
Viewers aren’t exactly doing backflips either. In their most recent outings, the eight new broadcast comedies averaged a miserly 1.8 rating in the 18-49 demo, while the seven newbie dramas barely notched a 2.0. Those are catastrophically lousy numbers to be sure, but until Nielsen processes the first batch of C3 ratings, it’s impossible to determine whether the new shows are hitting their guarantees.
Although media executives have been saying scatter pricing is on the rise, buyers characterize the Q4 market as tepid at best. Bank dismissed the scatter chatter as “useless,” as pricing is idiosyncratic to a host of variables. But a major infusion of cash will have to flood the marketplace if things are going to perk up, he added.
“If JCPenney and Apple hadn’t invested as much in TV in the first quarter, the upfront wouldn’t have been nearly as strong,” Bank said. “Maybe Samsung and Apple will go at it, or maybe there will be a big push by Microsoft ahead of Windows 8. We’re still looking for a breakout.”