Down (and out?) at the upfront
Ratings-challenged NBC apparently has booked $1 billion less in upfront advertising revenues for the fall season that it did a year ago, causing some observers to proclaim the end of life as we know it for network TV.
But don't get too perturbed by the plunge in NBC bookings, says the imperturbable John Higgins of Broadcasting and Cable Magazine, who provided the estimated results in the table below. "Upfront numbers are always an imprecise reflection of the TV ad market. Buyers jawbone and bluff like mad."
Much of the 34% plunge in ad bookings at NBC was absorbed by the competing ABC, CBS and Fox networks, which collectively scooped up approximately $800 million of the $1 billion booted by NBC. If John's estimates are correct, then total upfront bookings are only a couple of hundred million lower than they were a year ago, a reduction of about 2%.
By promising to improve its programming, keeping its rate increases modest and asking very nicely, ABC staged a particularly strong recovery from a year ago, gaining about $500 million in revenues over 2004.
Still, there are serious signs of static for broadcasters.
Procter & Gamble, the big kahuna of consumer advertising, which last year devoted 80% of its $3 billion ad budget to television, reduced its spend this year on broadcast TV by 5% and on cable by as much as 25%, according to the Wall Street Journal.
"Some industry executives see P&G's cutback in upfront commitments as little more than a ploy to delay buying ad time until later in the year when prices may be lower, " reported the Journal. "But P&G's decision already has contributed to what has been a difficult year in the upfront market," where broadcasters typically sell between 75% and 85% of their commercial inventory and cable networks sell half or more of their inventory.
Even though total ad budgets are up, "TV budgets are down," says David Verkin, the CEO of the Carat media-buying company. Speaking last week at a publishing conference, he was quoted by Media Post as saying "The TV business is as soft as possible."
While the simplest explanation for the soft upfront that is media buyers are getting better at beating up broadcasters, the nagging concern is that the fragmentation of the audience -- and the rapid proliferation of TiVo-like commercial-zapping machines -- will alter irretrievably the industry's traditional economics.
Only time will tell whether this is an isolated case of ruffled peacock feathers or whether the golden goose really has been cooked for good. Stay tuned.
But don't get too perturbed by the plunge in NBC bookings, says the imperturbable John Higgins of Broadcasting and Cable Magazine, who provided the estimated results in the table below. "Upfront numbers are always an imprecise reflection of the TV ad market. Buyers jawbone and bluff like mad."
Much of the 34% plunge in ad bookings at NBC was absorbed by the competing ABC, CBS and Fox networks, which collectively scooped up approximately $800 million of the $1 billion booted by NBC. If John's estimates are correct, then total upfront bookings are only a couple of hundred million lower than they were a year ago, a reduction of about 2%.
By promising to improve its programming, keeping its rate increases modest and asking very nicely, ABC staged a particularly strong recovery from a year ago, gaining about $500 million in revenues over 2004.
Still, there are serious signs of static for broadcasters.
Procter & Gamble, the big kahuna of consumer advertising, which last year devoted 80% of its $3 billion ad budget to television, reduced its spend this year on broadcast TV by 5% and on cable by as much as 25%, according to the Wall Street Journal.
"Some industry executives see P&G's cutback in upfront commitments as little more than a ploy to delay buying ad time until later in the year when prices may be lower, " reported the Journal. "But P&G's decision already has contributed to what has been a difficult year in the upfront market," where broadcasters typically sell between 75% and 85% of their commercial inventory and cable networks sell half or more of their inventory.
Even though total ad budgets are up, "TV budgets are down," says David Verkin, the CEO of the Carat media-buying company. Speaking last week at a publishing conference, he was quoted by Media Post as saying "The TV business is as soft as possible."
While the simplest explanation for the soft upfront that is media buyers are getting better at beating up broadcasters, the nagging concern is that the fragmentation of the audience -- and the rapid proliferation of TiVo-like commercial-zapping machines -- will alter irretrievably the industry's traditional economics.
Only time will tell whether this is an isolated case of ruffled peacock feathers or whether the golden goose really has been cooked for good. Stay tuned.
posted by Newsosaur at 11:28 AM
0 Comments:
Post a Comment
<< Home