Those low expectations mean the network haul-which climbed to $9.46 billion last year-won't top $10 billion. A 3% increase, the lowest since the ad market recovery in 2002, would mean an upfront of $9.74 billion. Broadcasters' upfront presentations to the ad community are scheduled for next week in New York.
Despite the loss of cornerstone hits "Friends" and "Frasier," NBC is expected to remain the dominant player at $3 billion, which is flat with its take last year. The General Electric Co. network has 32 original episodes of "The Apprentice" in the can for next season to fill the hole left by "Friends" departure on Thursdays. NBC's merger with Vivendi Universal Entertainment set to close in May, could see shows travelling between NBC and USA, in the same way "Queer Eye for the Straight Guy" migrated from Bravo.
CBS expects to bring in double digit increases. While buyers agree that Viacom's Eye network is in a good position thanks to stable management and strong shows such as "Survivor" and "CSI: New York," some are skeptical about the bullish double-digit prediction. Buyers believe its increase will only reach 9%, garnering it $2.4 billion.
News Corp.'s Fox Network, meanwhile, is said to be doing some innovative deals, and opening up the prospect of multi-year agreements to buyers, who predict the network will be up 3% to $1.65 billion.
ABC is widely predicted to be the loser network, with its take flat this year at $1.7 billion. While one optimistic buyer suggested ABC revenue could rise 3% to 4%, another said that they were staying away from ABC given that sales chief Mike Shaw had little flexibility in deal making, under pressure to maximize the Disney network's revenue.
ABC and CBS declined to comment. Fox and NBC were unavailable for comment.
Brad Adgate, senior VP-director of research at independent agency Horizon Media, said: "The broadcast networks did not have a great year and there's a lot of long-running series not coming back. ABC has suffered the worst."
That has many buyers taking the stance that they will hold strong against what they view as unreasonable demands by the networks, and will turn to cable as an alternative. Two media-buying executives predicted network prime-time rates will go down. And cable networks are giving buyers plenty of fuel, predicting that 2004 will see the sector overtake broadcast in prime-time ratings for the first time.
While some are suggesting as much as $1 billion moving to cable, others are saying the shift will be more modest, in the region of $400 million to $500 million in additional spending. When asked which single cable network was most likely to reap the benefits, Discovery Networks' TLC was cited most often, though in general the Turner networks, MTV Networks and Discovery Networks are all expected to have a good year.
Separately, complaints about network TV prices were frequent last week at the Association of National Advertisers' Advertising Financial Management Conference in Scottsdale, Ariz. Brad Simmons, VP-media services at Unilever, said his company expects to cut its network TV budget this year, noting Unilever began exploring alternatives after seeing last spring's hefty upfront increases. Mark Kaline, global media manager at Ford Motor Co., said Ford is actively considering alternatives such as cable and spot TV. "The burners are on, and the heat is rising," Mr. Kaline said.
Network TV last year accounted for about half of Unilever's total measured U.S. spending ($259 million out of a total of $548.6 million), according to TNS Media Intelligence/CMR. CMR's 2003 measured tally for Ford included $449.6 million in network, $260.1 million in spot and $104.6 million in cable; Ford's measured total was $1.34 billion.
Despite the tough talk from marketers, the ANA's recent Network Upfront Discussion Group failed to come up with any changes to the buying process (AA, May 3).
contributing: bradley johnson
Network revenue this season is far below the boom-market growth suggested in last spring's upfront. Actual revenue and % change from last season:
ABC, CBS, NBC
Prime time $3.2 B 5.8%
ABC, CBS, NBC, Fox
All day parts $7.2 B 7.2%
Revenue in $ billions for 4Q03-1Q04.
Source: Ad Age analysis of data from Broadcast Cable Financial Management Association and Fox Entertainment Group