Viacom's president and chief operating officer, who directed CBS, Viacom's broadcast network, to hold back inventory last year because of soft pricing, has requested a high 12% cost-per-thousand viewers increase over last year's upfront pricing, according to one media executive.
Thus marks the unofficial start of the upfront, the time of year when networks set ad rates for their upcoming programming.
Fox, which saw ratings declines last season, opened negotiations requesting a surprisingly high CPM rise in the 9% to 10% range for some categories including movies and video games. A Fox spokeswoman had no comment.
Throughout the industry, media buying agencies submitted budgets to networks en masse and some media plans have been returned to agencies with pricing offers. For example, number of Hollywood studios have already registered budgets this week with all networks.
But these are all initial offers and put forth largely as posturing -- the first foray into negotiation. The high number posted by CBS, for instance, could signal that Mr. Karmazin may opt to hold back inventory again this year.
Network and media agency executives expect some deals to be inked tonight and tomorrow -- launching the annual upfront bazaar.
NBC and CBS are still expected to be the pace-setters and establish where the market rates will settle. "It's really a two-horse town," said an executive. One media executive said NBC had closed some business with a CPM jump of 7% to 9%. NBC executives weren't available for comment.
Catbird seat for NBC
NBC is in the catbird seat in particular -- and it has moved more quickly with movie studios, traditionally the category that pays the highest CPMs. Movie studios, which saw their business increase 20% through the first five months of the year, are expected to boost spending, as well as foreign auto markers, according to executives.