Discovery Communications Concludes Its Upfront Business

Programmer achieves 5% lift in dollar volume

Six weeks after securing its first commitments from advertisers for the coming TV season, Discovery Communications has put a bow on the 2013-14 upfront bazaar.

According to media buyers, the Discovery networks (a collective that includes the flagship channel, as well as TLC, Animal Planet and Investigation Discovery) enjoyed another profitable upfront, booking CPM increases between 6 percent and 8 percent while boosting dollar volume by 5 percent.

Discovery declined to comment on its upfront negotiations.

While the cornerstone Discovery networks did a lot of the heavy lifting, ID also has been much in demand. Since the year began, the network formerly known as Discovery Times is beating Lifetime, Oxygen and WE in total-day deliveries of women 25-54. Ad dollars have followed; per SNL Kagan, ID last year raked in $195.8 million in ad sales revenue, up 57 percent versus 2011. (Discovery Channel remains the crown jewel, generating $571.6 million in ad sales.)

Movies, insurance and CPG were particularly strong for Discovery, which also did brisk business in the pharmaceutical category. As has been the case with most of the major networks groups, automotive was softer than expected, as domestic carmakers appear to have held back more money than usual.

Across the industry, foreign auto spend has helped temper the impact of the stateside squeeze, although those domestic dollars are certain to show up in scatter. General Motors is the nation’s third-biggest investor in TV, spending an estimated $1.18 billion on broadcast and cable in 2012 while Ford is No. 4 ($985 million).

Discovery booked advance deals for between 55 percent and 60 percent of its inventory, leaving itself in a position to capitalize on a strengthening scatter market. While it’s too early to get a read on Q4 scatter, the anticipated influx of homegrown car dollars in the fall is likely to tighten the screws even further. 

Directional at best, the upfront tells only part of the story. Per its Feb. 14 filing with the Securities and Exchange Commission, Discovery’s U.S. networks group in 2012 generated $1.46 billion in ad sales revenue, up 9 percent versus the previous year’s haul ($1.34 billion).

Discovery will report its second-quarter earnings on July 30.

In concluding its upfront business, Discovery joins the likes of Fox Cable Networks, Turner Broadcasting, Viacom and A+E Networks at the finish line. Broadcasters CBS, Fox and the CW are also done, while NBCUniversal’s broadcast and cable nets have one major agency left outstanding, as does ABC. 

While this upfront has dragged on much longer than anyone may have anticipated, the traditional (and wholly unofficial) July 4 deadline tends to get pushed aside every three or four years. In 2006 and then 2009, the spring bazaar dragged well into the dog days of summer. By way of contrast, broadcasters in 2012 folded their tents on or before June 13.

All told, between $400 million and $500 million appears to have fallen out of the TV marketplace; buyers said the bulk of those dollars had been earmarked for broadcast. This is not to say that the money went to digital—on that score, there has been little disagreement—or that most of it won’t eventually surface in scatter. In other words, if few sellers are clicking their heels, nobody’s exactly fumbling for the Wellbutrin either.