The upfront figure represents a $100 million increase over the network's $1.8 billion total for its prime-time schedule in last year's market. Combined with the network's ability to sell Super Bowl time for a record price per 30 seconds, it is just the latest sign that more marketers are eager to lock in lower prices for TV time now rather than deal with expensive "scatter" later on when many are facing a shaky economy.
Both the 2007 and 2008 upfront figures include advertising sold for four hours of prime-time football on Sundays. This time is sold by NBC Sports, not the entertainment division, and it could not be immediately determined what value that ad time might have on the coming fall schedule. The first year NBC sold its prime-time football package, in 2006, it booked $300 million in the upfront market.
One media buyer projects the overall market could reach $9.2 billion, and therefore NBC's $1.9 billion figure "might be on the high end." Last year, the five broadcast networks took in around $9.1 billion in ad commitments. ABC secured around $2.4 billion; CBS about $2.45 billion; NBC around $1.8 billion; Fox about $1.9 billion; and CW between $630 million and $650 million.
NBC was able to secure price increases in the mid- to high-single-digit percentage range in the cost of reaching 1,000 people, also known as a CPM, according to the executive. The network sold about 80% of its inventory, "up a little bit" from last year's market, the executive said. The rest is left to be sold as "scatter," or ad time purchased for more immediate needs by marketers.
This executive attributed the rise in volume to advertisers moving money previously earmarked for scatter into the upfront in order to lock down better prices. With the economic outlook uncertain, more advertisers have expressed concern about their ability to advertise to consumers worried about credit, commodity prices and the housing market.
The executive said NBC also felt its decision to unveil its programming schedule in April, rather than May, contributed to the network's ability to establish "several deals with key clients" and represented "money we really took out of the market before the market started."
Other networks dealing
NBC wrapped its negotiations earlier than anticipated. News Corp.'s Fox and Walt Disney's ABC have been leading the market, with ABC able to secure high single-digit percentage price increases and Fox able to secure in some cases price increases in the low double-digit percentage range. CBS and the CW have also begun negotiations, according to people familiar with the matter. Media executives believe some of the bigger broadcasters may be enjoying a spike in volume by taking money away from the smaller CW, which saw significant ratings decreases in the recently completed TV season.
Cable has also been gearing up, with Time Warner's Turner offering an aggressively priced package of time in its best shows for a premium, without tying marketers down to lesser-performing programming. NBC Universal's Bravo and USA have also been in the market discussing similar options. NBC Universal's cable outlets are seeing budgets that are stronger than anticipated, according to the executive.
Networks typically sell 75% to 80% of their inventory in the upfront market.