NBC CUTS UPFRONT RATES

Struggling Network Reduces CPM Price 3%

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NEW YORK (Adage.com) -- After attempting to hold the line for the past two weeks, General Electric Co.-owned broadcast network NBC has cut its upfront rates, according to executives involved in the proceedings.
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The network is doing deals with advertisers at rates below what advertisers paid last year, in some cases as much as 3% less, according to the executives.

Go negative
The move by the network to “go negative” reverses a decade-old trend that saw the network pricing itself above the other broadcast networks and commanding premium rates, measured as the cost per thousand viewers, or CPM.

With a resurgent Walt Disney Co.-owned ABC setting the bar at CPM increases of 4% to 6% and agencies baulking at the prospect of paying NBC more for a fall schedule that gained a lukewarm reception during upfront presentations, NBC had little choice but to make deals at below market rates.

A network source confirmed that NBC was doing deals between flat and minus 2%. Three executives familiar with negotiations said they knew about deals at negative rates. One unsubstantiated rumor had NBC doing deals at minus 8%.

Thursday night
The difference in pricing is likely to be due to whether any agencies had bought time on NBC’s once-legendary Thursday night schedule. Viacom's CBS won Thursday night last season.

"The heavier Thursday mix you had, the more negative you can go," said the buyer. "They're writing some business at -3% but if I were a movie advertiser, I wouldn't settle for that."

Outside of the prime-time programming lineup, the network earned low single-digit increases for its early morning franchise, Today, but offered rollbacks for both prime time and late night, where there is a glut of inventory.

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