Media buyers and sellers see no way the syndication market can match last year's $2.3 billion take.
The broadcast networks accepted much lower-than-expected cost-per-thousand rates this year, forcing cable and syndication sales departments to readjust upfront pricing. Last year cable took in $6.1 billion, and before the broadcast market many predicted it would be up double digits. Now most agree it will be flat or-at best-up only slightly. The broadcast upfront market finished slightly below last year at $9.2 billion (AA, June 20).
That leaves syndication, always the last to line up for TV dollars, without much clout. Syndication CPM rate increases, which last year were between 6% and 10% for top-tier shows, are now hovering at around 3%. For shows that slid in the ratings this year, rates are even lower.
After another slow week, most cable networks are about 50% to 70% done with their upfront selling; CPMs range from -2% to 4%. NBC Universal's cable networks and Lifetime are the furthest along, but reports suggest two major agencies have yet to commit most of their money.
Sellout levels in cable are expected to average 50%-5% to 15% below last year's-and networks are betting on a stronger scatter market. (Cable networks typically sell 55% to 65% of their inventory in the upfront, versus 80% to 85% for broadcasters.) Both sellers and buyers would like to see a normal scatter market emerge this year as stronger scatter pricing justifies advertisers' making upfront dollar commitments. "The big question," said one cable network sales head, "is whether those who've made upfront adjustments will spend the balance in scatter or not."
Sellers also report that Procter & Gamble Co.'s decision to shave around 20% off its TV spending is a reality that has affected the market, as has the slow start from General Motors Corp., which is not in full-fledged negotiation mode yet, said some sales executives.
However, one senior sales executive who did not wish to be named said the syndication market was proceeding: "Buyers had been testing the water, there was a waiting game, but the log jam has been broken."
Daytime is one bright spot, thanks to the talk show hosted by Ellen DeGeneres. According to a number of executives, Campbell Soup Co. has agreed to a deal with "Ellen," which is sold by Warner Bros. Domestic TV Distribution. Campbell Soup had a product-placement deal with daytime show "The View" in 2000 that was criticized for lack of transparency. Neither the marketer nor Warner Bros. returned calls by press time.
Two other talk shows, "The Tony Danza Show" from BuenaVista Television Advertising Sales and "The Maury Povich Show" from NBC Universal TV Distribution, were also cited as popular among buyers.
"The better performing daytime shows are doing fine," said Bob Cesa, 20th Television's exec VP-ad sales. News Corp. unit 20th Television is selling "24," "Malcolm in the Middle" and "Divorce Court." One seller said it would be wrong to dwell on the negative pricing, since the top 20 syndicated shows could command around 70% of available ad dollars.
contributing: abbey klaassen