Movie studios ignite broadcast upfront

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The broadcast network upfront market is expected to move into high gear this week, with most networks already in early stages of negotiations, especially with automakers. Fox was out early closing movie-studio deals, while buyers suggest it was not the only one, with CBS and the WB reportedly sealing early agreements. The WB, meanwhile, is pinning down a branded-integration deal with Procter & Gamble Co.

"Fox is almost done for movies," one agency executive who buys on behalf of a movie studio said May 27. The executive said he believed deals had closed quickly because of the desire for exclusivity during each commercial break, and the need to get into top Fox shows such as "The Simpsons," which draw a younger, marketer-coveted audience.

News Corp.'s Fox ended the 2003-2004 season with a 4.1 rating in adults 18-49, just a whisker behind NBC at 4.2. For the past several years, thanks to its strong Thursday night lineup with anchor "Friends," NBC was in high demand with movie studios looking to push weekend releases.

A Fox spokesman said, "We are not confirming anything until we're done."

Time Warner's WB is close to concluding an agreement with P&G that includes branded integration, according to an executive close to the deal. This executive said it was the first time the package-goods giant had done such deals with the youth-targeted network. P&G and WB declined to comment.

Executives on the buying and selling side acknowledged some preliminary activity ahead of Memorial Day weekend. A senior broadcast-network executive said he expected agency budgets to be registered by May 28.

no panic

Bill McOwen, who negotiates on behalf of clients including Volkswagen, Audi and MCI for Havas-owned media buying agency MPG, said: "The movie studios are the serious negotiators; autos will come next."

"What we are not seeing is any kind of panic," he said. "It [the broadcast market] has started moving, but [the market] is going to pace itself. I don't see anybody jumping."

Increased spending by movie studios and automakers have already helped fill the coffers of top-tier cable networks, and media buyers said $2 billion was already committed.

autos big boosters

The automakers were among the biggest boosters of cable. Ford Motor Co., Toyota Motor Corp., Hyundai Motor America and Mitsubishi Motors North America have all made early agreements with cable networks at higher rates than they paid last year, according to Automotive News. Mitsubishi has shifted 20% of its spending to national cable, syndicated and spot TV, (see related story, P. 3) while Ford's cable spending is up 40%, according to executives.

Last year, cable took $5.2 billion in the upfront, while broadcast networks raked in $9.5 billion.

A senior executive at USA Networks, part of the newly merged NBC Universal, said: "We are pretty much done, as are most of the top 10 cable networks." The executive estimated that the top-tier cable channels are seeing cost-per-thousand [CPM] increases in the high single digits, with volume up 15% to 20%.

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