"It's low-single digits for the top guys and everyone else is low to flat and one guy is negative," said Larry Novenstern, exec VP-director of national electronic media, Optimedia. "Most people seem to be going for volume and that dictates lower pricing. It's not going to be anywhere near $9 billion."
Andy Donchin, senior VP-national broadcast, Carat, is traditionally one of the early market movers. But even he said, "If the money is not as strong, I don't see any rush to get in." Of course, the question for upfront watchers is the extent to which media buyers are bluffing when they say they won't pay the 4%-6% CPM increases that broadcast networks commanded during last year's upfront.
"We're all still posturing," admitted Geoff Robison, senior VP-national TV, Palisades Media Group, which buys for movie studios. "The three main agencies are going to lay down the upfront and what they do will set the marketplace. They'll probably do something with ABC. This is a very different year." ABC had no comment on talks.
If buyers make good on the promise that increases are in the low-single digits this year, that's bad news for cable and syndication, though both outlets have the advantage of arguing that their audiences are much more likely to watch shows live. (The agencies want to negotiate on ratings that only record the number of viewers who watched the show as it aired, labeled "live." Broadcast sellers have said they want to count viewers who watch their programming using a digital video recorder for up to seven days after the show aired, an approach dubbed "live plus seven.")
Turner Broadcasting is said to be looking to switch to the live-plus-seven ratings currency, while cable news channels might be justified in asking for live plus same day. According to one executive, if a DVR-using viewer pauses a program for as little as 10 seconds, that viewer then falls into Nielsen's live-plus-same-day category.
While agencies are far from colluding on how to approach the negotiations, there appears to be significant peer pressure on anyone who breaks rank in the live-plus debate. If early deals are happening, one buyer said, it's most likely that the parties are negotiating deals in principle and then agreeing that pricing will be whatever the market decides at a later date. Market rumors last week had ABC making early deals.
Gary Carr, senior VP-broadcast services at TargetCast, suggested one option to break the live-plus deadlock: Agencies could agree to a lower CPM in return for an agreement that establishes live-plus-same-day as the new currency. "The worst it will be is live-plus-same-day," Mr. Carr said. "There's not enough data based on a big enough sample."
Mr. Carr pointed out that when Nielsen introduced people meters twenty years ago agencies had a lot more time to weigh the new numbers. His summation of the marketplace so far: "The agencies have the upper hand. The upfront is not going to go away, but there hasn't been a penalty in scatter; people will wait longer. Johnson & Johnson is a major advertiser saying we don't have to go upfront. That's a big statement."