The network says it nears the finish line “very confident that CBS has once again achieved the highest pricing and most total dollars” in sales of prime time ads for the season that begins this fall. The tally does not include the NFL games CBS will air on Thursday nights for several weeks; they’re being sold separately. In addition to the overall sales, the company adds in a rare public statement about the upfronts that it has made progress in selling ads based on the number of eyeballs they reach over seven days (known as C7), up from the conventional three days (C3) — a major issue for CEO Les Moonves. The C7 calculation “is now playing a meaningful part in our negotiations.”
The network didn’t offer specific numbers to support its claim. People tracking the market say CBS has been able to raise per-viewer prices for its ads by about 6% vs last year, when it generated an estimated $2.5B+. If correct, then that’s about twice the rate of its rivals outsiders estimate. But it’s hard to make apples-to-apples comparisons as deals include options for cable and digital properties. The overall market is said to be weaker than expected with some advertisers holding back in the hope of landing better terms later in the season.
7-Day Measurement Gaining Momentum
CBS COO tells investor group C7 “is now going to become the standard,” but an analyst predicts only a “minuscule” benefit. Deadline's David Lieberman reports.
This is one of the early stories from this year’s upfront season: Many advertisers appear ready to give up their fight against counting audiences who watch their commercials up to seven days after they air instead of the conventional three days. That soon could present CBS with a “9-digit [revenue] opportunity, and those are high-margin dollars,” COO Joseph Ianniello said this morning at the Bank of America Merrill Lynch Global Telecom and Media Conference. The seven-day measurement period (also known as C7) “is now going to become the standard. … We have shows that millions and millions of people are watching on the fourth day and after” that don’t count in current ad sales. “It doesn’t make sense to me.” Indeed, the audience of delayed viewers is so big that it would be the equivalent of “a massive hit on cable networks.” While he wouldn’t identify specific categories of advertisers that are most interested in seven-day purchases, he noted that cable companies are developing the ability to change ads in VOD and “the technology is allowing us to be more nimble.” Ianniello’s rosy forecast for C7 sales contrasts with the view of Bernstein Research’s Todd Juenger, who says that CBS likely will see a “minuscule” benefit which he estimates will be in the tens of millions. Read More »
“Nobody on Earth brings more quality programs to audiences than we do,” CBS CEO Les Moonves told buyers today at his company’s annual Carnegie Hall presentation. The traditional media triumphalism provided a contrast with his rivals’ efforts this week to talk up corporate synergies and digital initiatives — especially as tech powers including Google, Microsoft, Yahoo and AOL try to win dollars to online video. “Our friends in Silicon Valley are expanding from developing logarithms to developing television shows,” Moonves says. Following the tech NewFronts presentations, he added, “They used to call us OldFronts until they started doing exactly what we do.”
Despite the bravado, even CBS can’t ignore the growth of – and advertiser interest in — online viewing. The CEO noted in passing “our ever-expanding digital and interactive business” and said “the best news for all of us is that every eyeball is being counted.” CBS Network Sales President Jo Ann Ross kicked off the event promising “custom multiplatform solutions” to reach people “where ever they are and whenever they are watching.” But the company provided no details.
Not much change from last year in the basic business proposition that ABC offered to upfront advertisers today: Forget that it’s the No. 4 network in prime time for 18-to-49 year olds. Execs touted the “brand halo” (as entertainment chief Paul Lee put it) that Disney and its properties offer ABC. “When you bring them all together they are as unstoppable a force as The Force,” Disney-ABC Television Group President Anne Sweeney said in a forced reference to the parent company’s acquisition of Star Wars creator Lucasfilm. Sales President Geri Wang and ESPN sales chief Ed Erhardt shared the stage to illustrate ways advertisers can mix and match appeals to women and men, for example via New Year’s programming on ABC and games on the sports network. Wang added that ABC offers more original programming than other networks which “creates great moments for your brands.”
Related: ABC 2014 Schedule: ‘Scandal’ Moves To 9 PM As Part Of Shonda Rhimes Thursday; ‘Black-ish’ Gets Post-‘Modern Family’ Slot
The network also talked up digital and data. Sweeney says the company will “continue to develop” its WATCH ABC app. It will offer opportunities to watch live broadcasts from multiple viewpoints, multitask on social media, and share clips with others. That can provide a “more integrated, immersive, personalized experience…..You get our passion for innovation and technology and the resources we put behind it, and the scope of our brand and the strength of our businesses.”
Related: … Read More »
Listen to (and share) episode 35 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s executive editor joins host David Bloom to discuss the advertising upfronts this week, including the CBS victory lap and whether an auto ad spending blitz will finance this year’s pricey programming; Daniel Loeb’s (and possibly Les Moonves’) plans for Sony; and National CineMedia’s whiz-bang new technologies to give exhibitors and studios more bang for their in-theater ad bucks.
Deadline Big Media, Episode 35 (MP3 format)
Deadline Big Media, Episode 35 (MP4a format) Read More »
I hear CBS might be done ordering new series, at least until after its upfront presentation on Wednesday. The network already has picked up five comedy series and three dramas, including two pickups on Sunday, of drama Reckless and comedy Friends With Better Lives. I haven’t heard that any of the three remaining contenders — comedy Bad Teacher and dramas Backstrom and NCIS: Red — are dead, so pickup talks might continue after the upfront for what already is one of the largest CBS slates of new series in recent memory. (Additionally, CBS is in retool/reshoot conversations about comedy pilots The McCarthys and Jim Gaffigan) UPDATE: Rumor is that Red is dead.
Related: Which Pilots Are Still Alive At CBS?
With sales cooling in television’s scatter advertising market, negotiations underway now for the huge upfront market will generate less than networks would like Nomura Equity Research’s Michael Nathanson predicts this morning in his thorough quarterly review of ad trends. He forecasts that overall U.S. sales will grow 5.6% in 2012, making him more optimistic than ZenithOptimedia (which projects U.S. sales +3.6%) and MAGNA Global (anticipating +4.0%). Television will be +6.6% this year with help from the additional spending for the 2012 election campaigns and the Summer Olympics — but will decelerate to +0.9% next year. Demand in the broader marketplace “seems to be stable,” he says, after rising 5.3% to $19.2B in the first three months of this year vs the same period last year. The 11.8% boost in Q1 online sales to nearly $5B accounted for much of the growth. But television was up 6.0% to $10.2B. The return of NBA games, following the basketball league’s lockout, helped cable networks to lead the way, +7.9% to $4.8B. But the major broadcast networks enjoyed a 5.0% bump to nearly $3B. Nathanson says that Fox’s ratings struggles with American Idol (and not including the network’s boost from the Super Bowl) offset the mid-to-high single digit growth at CBS and ABC. Read More »
It’s in almost everybody’s interest to try and gin up excitement for next week’s major TV network upfront presentations: The celebrities are lined up, and the shrimp and booze ordered, in an effort to entice ad buyers to conditionally bet billions of dollars on shows that haven’t been written yet, and ratings points that can’t be accurately measured. Wall Street analysts say that CBS will be the big winner in light of its strong ratings. For example, Credit Suisse’ Spencer Wang predicts this morning that CBS will record commitments of $2.8B (+4%), followed by ABC at $2.4B (+2%), Fox at $2.0B (+2%), NBC at $1.7B (no change), and CW at $477M (-1%). But for the most part, analysts are preparing to yawn. ”As it currently stands,” RBC Capital Markets’ David Bank writes this morning, “broadcast year 2012/13 is setting up to be a ‘boring’ year for network TV advertising, with few surprises.” He reflects the consensus view that advertisers are less likely to be stampeded into making deals than they were last year. The economy looks wobbly — nobody knows how the European debt crisis will play out — and overall TV ratings continue to slide. Demand from auto companies is robust “but likely will decelerate,” Bank says. Meanwhile pharmaceutical companies have been standoffish “and likely will continue to remain so for the foreseeable future” with fewer new products teed up and some major patents due Read More »
They could, Barclays Equity Research analyst Anthony DiClemente says in a report this morning. He still predicts that sales in television’s pre-season marketplace will rise — by 4.3% to $9.49B for the Big Four broadcast networks, and by 6.3% to $9.88B for cable channels. DiClemente says he’s encouraged to see consumers’ growing willingness to buy cars; auto makers account for about 20% of all TV ads. But this year’s increase in upfront sales will lag last year when the top broadcasters were up 7.9%, and spending on cable rose 16.1%. Some advertisers will hold back “to maintain some flexibility in case of macro choppiness” later this year — meaning, they’ll wait to see if they can get a bargain in the scatter market if the economy turns south. Meanwhile, Fox and NBC may sell less of their ad inventory in this year’s upfronts, hoping that their ratings will improve and give them more leverage in negotiations with advertisers. While everyone looks at total dollars networks collect in upfront deals, the more important barometer for their health is the CPM price they can charge for each 1,000 viewers they reach. DiClemente predicts that ABC will end up +8%, CBS will be +10%, Fox will be +9%, and NBC will be +7%.
Never mind the strong upfront ad sales for broadcast and cable networks. The slowing economy is “finally starting to impact marketers’ budgets,” UBS Investment Research analyst John Janedis said in a report today as he downgraded his investment recommendations for Discovery Communications and Time Warner and lowered his stock-price targets for Scripps Networks and Viacom. He says the cheering from upfront sales will be short-lived: Broadcasters sold $9.3 billion in inventory, up about 6% from last year, while he expects cable networks to record about $9.2 billion in orders, up about 15% from last year. But advertisers will cancel a lot of those orders later this year. The scatter market “has finally started to slow, which could impact results as early as” the third quarter, he says. Janedis also is concerned about the declining ratings at broadcast networks and says that “cable is also at risk of losing a portion of its audience to other platforms” including online services such as Netflix. The fears about slowing ad sales led him to change his view of Discovery and Time Warner to “neutral” from “buy.” Time Warner has an additional problem in film. With the soft start to Green Lantern, “the success of (Time Warner’s) superhero strategy in a post-Harry Potter world is not a foregone conclusion,” Janedis says.
As this year’s broadcast network upfront market just wrapped up, we can see the force that’s been driving sales: Fear. ABC, CBS, CW, Fox and NBC seem to believe that the economy will weaken. They’re selling as much of their primetime ad inventory for the 2011-2012 season as they can before it does. Although there are no official figures for the upfront market, word has it that most of the networks are selling about 80% of their inventory this year — up from an average of about 77% last year and 67% the year before. And advertisers are paying higher prices for network TV time because they’re still afraid that alternative platforms, including digital, aren’t potent enough to move product.
The five English-language broadcast networks did well enough to boast about how effectively they played their hands. Their collective ad dollar haul was $9.1 billion-$9.2 billion, up from $8.5 billion last year. Unit CPM prices were up about 14% for CBS, 11% for ABC and CW, 10% for Fox, and 9% for NBC. That’s pretty good considering that their ratings were down across the board in the season that ended in May, and TV audiences are growing older. But for the most part, the price increases were “smaller than what people were writing about four to six weeks ago,” says Jordan Levin, former CEO of the WB Network who now runs talent management company Generate. For instance, the projections for the total … Read More »
CBS chief Les Moonves pretty much accused Fox this morning of spoiling the advertising upfront season for the broadcast networks by failing to hold out for higher prices. CBS is angling for increases of about 18% vs last year in the price advertisers pay to reach 1,000 viewers. But Fox, which cut the first major ad deals this year, is said to have settled for about 10%. ”Fox plays their game. We play our game, and I like our game,” Moonves told analysts at the Nomura Securities U.S. Media Conference. ”We’re not going to sell at 9% or 10%.” Maybe not. But while CBS digs in its heels, the smart money is betting that it will have to settle for a lot less than Moonves wants. Although many of the biggest ad deals have yet to close, the word in advertising circles is that ABC has agreed to low-double-digit percentage price increases for some of its spots. A lot could change over the next few days, though. Networks and advertisers appear to be in the home stretch of their negotiations, leading some to believe that the upfront dealmaking could wrap up within the week.
In other news, Moonves told the investor group that CBS will not make an offer next week to land broadcast rights to the 2014 Olympic Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio De Janeiro.
From the presentations ABC, NBC and Fox executives have made to advertisers so far this week, you’d think they were more concerned about competition from digital media than they are about each other. ABC continued the pro-TV theme at its upfront presentation Tuesday, telling ad buyers that its shows — and their ads — translate well to digital media. Disney-ABC Television Group President Anne Sweeney reassured them that on the network’s digital player, “the fast forward is disabled to make sure (viewers) see your ads.” Although hard data was in short supply, ABC Sales President Geri Wang added that the company’s research shows that commercials on its programs “deliver consistent ad impact” on devices such as the iPad as effectively as they do on TV. The company is preparing a study that will focus specifically on iPads. Execs added that ABC’s programming appeals to young, educated, well-to-do people looking for escapist entertainment — “just the demos you want to reach,” Wang said. In hard times, “our brand of uplifting entertainment could not be more relevant,” ABC Entertainment Group President Paul Lee said. But moments later, late-night host Jimmy Kimmel deflated that claim. Every year, he said, “we shower you with promises, and follow through on none of them.”
Upfronts: It’s All About Ads & The Economy
Advertisers like NBC’s and Fox’s decisions to add comedies to their fall lineups but say the clips shown to them today don’t show enough to suggest whether any will become hits. ”Comedies are the hardest thing to do,” says Gary Carr of Targetcast. Even 30 Rock, a survivor on the NBC schedule, ”goes over most people’s heads. It’s not doing that well.” One advertiser says that “what you see today (at the upfront presentations) is not necessarily going to be there (on the shows) in the fall.” Still, comedies are big this year because Modern Family demonstrated that they can get young people, and they repeat well. The two shows getting the most attention are NBC’s musical Smash and the network’s remake of the British hit Prime Suspect. “It made a star out of Helen Mirren,” Horizon Media’s Brad Adgate says.
At Fox, advertisers wonder whether there’ll be talent-contest overkill by airing Simon Cowell’s new The X Factor in the fall, followed by American Idol in the winter. “At some point it’s too much,” says Lyle Schwartz of GroupM. Buyers also aren’t sure yet whether Fox will attract much interest for its offer to sell ads that would run on a show when it airs on TV as well as across digital platforms such as Hulu. Although it “sounds good in theory,” one advertiser says, it may simply be “a … Read More »
Just about everyone says that the 2011 upfront ad sales season that kicks off this week will be a record-setter. Barclays Capital analyst Anthony DiClemente expects advertisers to commit about $9.2 billion for prime time spots at ABC, CBS, Fox, and NBC in the season that begins this fall. That’s up 7.5% vs. last year and will beat 2008’s record $8.8 billion. He also says this will be the first year buyers will spend an equal amount on all of cable, up 15.3%. But don’t fool youself into thinking that this has much to do with the quality of the sitcoms, dramas, and reality shows that execs will unveil to ad buyers this week at the networks’ unconscionably extravagant presentations.
Once buyers recover from the networks’ childish efforts to dazzle them with celebrities, shrimp, and booze, they’ll begin their mundane deal-making for clients who need to be sure that they’ll have airtime to help them move product. But companies don’t want to make the same mistake that a lot of them made last year by postponing ad buys in the hope of landing a better deal in the scatter market. Many who waited had to pay as much as 40% more for spots in the first quarter of 2011. Auto makers, TV’s biggest advertisers, can’t afford to sit on the sidelines. They hope to sell about 13 million cars this year. That would be up 13% from last year, but still short of the 16 … Read More »
Here’s why: Media stocks are up 24.4% over the last six months, outperforming the benchmark Standard & Poor’s 500, which rose 15.1% over the period. So they already reflect a lot of optimism. But investors may be disappointed by upcoming news about ad sales, ratings, and ticket sales, Nomura Securities analyst Michael Nathanson says in a report out this morning. His warning comes as media executives prepare to release their quarterly earnings and talk to Wall Street about the state of the business. They conduct hour-long infomercials designed to persuade the world that everything is fine — or, if it manifestly isn’t, that it’s someone else’s fault.
But Nathanson says the companies’ go-go projections about over-the-top ad sales miss how much Japanese auto makers are cutting production as they grapple with parts shortages following the country’s earthquake and tsunami. For example, Toyota will crank out 35,000 fewer cars than planned in North America in March and April. That’s a big deal: Auto companies typically spend about $1,200 on ads for each car they sell. Meanwhile, overall broadcast and cable network ratings stank in the first quarter. The Big Four networks’ live ratings were down 15.9% vs. the same period last year. As for movies, if you don’t know about this year’s miserable ticket sales, then you aren’t paying attention — although Nathanson says that box office would have been up 11% if last year didn’t include Fox’s Avatar and Disney’s Alice In Wonderland. Read More »
Discovery Communications’ networks will hold their upfront presentation in New York this afternoon. Here is the new programming they will be announcing. (The slate for OWN’s, Discovery’s co-venture with Oprah Winfrey’s Harpo, was announced separately.) Flagship Discovery Channel is adding four new unscripted series to its lineup, including Penn & Teller’s Secrets of the Universe. TLC has picked up new spinoffs of its Say Yes to the Dress franchise. New series also include the previously announced Homecoming, hosted by Billy Ray Cyrus, and I Kid, starring Brad Garrett. TLC also has acquired the U.K. series Big Fat Gypsy Wedding and will develop an American version. Animal Planet will add 14 new series to its lineup, including Romance is Dead, about a family running a taxidermy shop in Romance, Ark., and my personal favorite, Ned Bruha: Skunk Whisperer. On the heels of its recent facelift, Science announced a second season of Ricky Gervais and Stephen Merchant’s An Idiot Abroad, An Idiot Abroad: The Bucket List. Here are descriptions of the new programs by network: Read More »
Cable channels are already making upfront presentations to advertisers, and those sales efforts will accelerate on Thursday when Discovery Communications introduces its fall shows. According to new forecasts out this week which do not take into account the deepening NFL labor strife, cable channel sales could hit $9 billion during the coming 2011 upfronts, up 11.5% over last year. As for broadcast, Miller Tabak analyst David Joyce projects a 14.9% increase to nearly $9.9 billion for the Big Four networks’ primetime schedule unveiling next month. Media services firm Zenith Optimedia also said this week that it expects double-digit gains in cable and broadcast sales. Car, cell phone, and banking service companies – eager to take advantage of the thawing economy – could make this upfront ad-sales season one of the strongest since 2003. Auto companies normally account for about a quarter of TV ad sales but were in a deep slump during the economic crisis giving the TV honchos fits. Now they’ll likely drive the market once more. They’re introducing 65 new models this year vs. 60 in 2010, and only 40 in 2009. Read More »