These preliminary numbers for the fall TV season offer one more sign of the upturn in advertising that many expect by the third or fourth quarter. To be sure, comparisons are easier because last year's numbers were so depressed.
The dollar increase would be up from last year's $6.8 billion upfront, which tumbled 16% from 2000's $8.1 billion record. The overall upfront revenue figure is affected by changes in program pricing, ratings and decisions by networks and buyers on how much of their inventory and budgets to place in the upfront.
Program pricing-cost per thousand viewers (CPM), a more accurate measure of the upfront market's health-fell 3% to 9% last year. The upfront refers to the period in May and June when networks sell TV time in advance of the fall-to-summer season; about 70% of time is bought before the season starts.
"It certainly feels more optimistic than where we have been," said Mike Shaw, president-advertising sales and marketing at Walt Disney Co.'s ABC Television. "We don't have a lot of folks coming to us saying the money will be down. We did have that last year."
In dollar terms, buyers' and sellers' early projections average out to a $7.2 billion upfront: General Electric Co.'s NBC, $2.3 billion; Viacom's CBS, $1.7 billion; ABC, $1.3 billion; News Corp.'s Fox, $1.2 billion; AOL Time Warner's The WB, $425 million; Viacom's UPN, $300 million.
Media buying executives said program pricing could range from down 3% to up 2% vs. last year, depending on the network.
Sellers, not surprisingly, are more optimistic. Network executives, discussing their networks and rivals, expect NBC to seek an 8% to 9% CPM increase; CBS, 7%-8%; and ABC and News Corp.'s Fox, 5%. They said the strong second-quarter scatter market (AA, March 11) suggests marketers are ready to spend. Scatter refers to time sold during the season.
Some buyers, including Dan Rank, managing partner of Omnicom Group's OMD USA, said it's too soon to predict the upfront. He discounts networks' rosy projections. "You know how many budgets I've seen? Zero. So how can these guys guess a number?"
But some on Wall Street see an upturn. Chris Dixon, managing director for UBS Warburg, expects upfront dollars to rise 4% to 10%. He cites strong auto sales as one reason the upfront coffers will improve.
More than other networks, ABC needs a rebound, considering its ratings among the key 18-49 viewers slipped over 20% this season. To repair ABC's image with advertisers, Susan Lyne, the new president of ABC Entertainment, did an informal series of meetings with advertisers last week in New York. She talked about returning the network to its roots-with more family-oriented programs like former ABC shows "Home Improvement" and "Roseanne" as well as CBS' current "Everybody Loves Raymond." Still, she told Ad Age, "I hesitate to use the word `family' because it feels boring."
"Susan Lyne exudes credibility," Mr. Rank said. "The fact that she stands up there and didn't say, `We are really, really excited about this.'... I say thank you. If you weren't excited about it, you wouldn't have put it on."
contributing: david goetzl