Upfront Update: NBC Open for Business

Peacock landing 9% CPM gains in 2011-12 bazaar

NBC on Monday joined the upfront fray, writing deals for its prime-time inventory at significant premiums over last year’s rates.

The last broadcast network to get into the game, NBC is landing 9 percent CPM increases for time on its 2011-12 schedule.

If NBC’s gains are more moderate than those commanded by its competitors—at the top of the heap, CBS is writing 14 percent increases, while Fox closed the bulk of its deals at 11 percent premiums—this year’s rates represent a healthy increase from the 2010-11 bazaar. According to analyst estimates, NBC last year averaged 6 percent CPM increases in the upfront, off two ticks from a four-net weighted average of 8 percent.

Pulling apart what NBC’s been up to over the last several days has been like trying to unstring a box of Christmas lights while wearing boxing gloves. Because the network enjoys an affiliation with some very robust cable brands—the No. 1 channel in prime, USA Network boasts the most robust lineup of original scripted series on the cable dial, while Bravo is that rare combination of reach and niche—the broadcaster is increasingly looking to cut deals across the various NBCU platforms.

In other words, the complications posed by writing multiplatform deals may have slowed NBC more than any battles on price.

NBC closed out the 2010-11 TV season ranked fourth among the 18-49 demo, with an average rating of 2.3. This represents a 14 percent decline from the previous campaign when it aired the Vancouver Winter Olympics.

During its May 16 upfront presentation, NBC executives were quick to warn media buyers that it wouldn't be looking for a quick fix with its new programming lineup. In a bid to improve its stature in prime time, NBC is introducing a new night of comedy on Wednesdays from 8 p.m. to 9 p.m.; moreover, the network will look to bolster its flagging performance Mondays through Thursdays at 10 p.m. with two new and two returning dramas.

Buyers were particularly enthusiastic about NBC’s midseason musical, Smash, which will lead out of The Voice on Monday nights at 10 p.m.

The network’s guarded optimism echoes an earlier sentiment voiced by NBC Universal CEO Steve Burke. In February, the Comcast transplant told investors that it could take five years to right the NBC ship, adding, “we certainly don’t expect to see anything in the next year.”

Much further along in its deal making is ABC, which has been cutting premiums at around 10 percent.

ABC closed out the season ranked third among the demo, averaging a 2.5 rating/7 share, or 3.2 million viewers 18-49, in prime time. That marks a 7 percent decline from the 2009-10 campaign. ABC also finished third in overall deliveries, drawing an average nightly audience of 8.48 million viewers, according to Nielsen.

Given the somewhat subdued dynamics of the marketplace, analysts have begun to revise their upfront forecasts downward. Last last week, Miller Tabak analyst David Joyce projected that ABC, CBS, NBC, and Fox would take in $9.49 billion in prime-time upfront commitments, on an average CPM hike of nearly 11 percent. That represents a 4 percent drop from Joyce’s earlier assessment when he anticipated a $9.85 million haul.

Joyce now sees CBS landing the most early commitments ($2.93 billion), followed by ABC ($2.65 billion), Fox ($2.18 billion), and NBC ($1.74 billion).