"The upfronts have become a phenomenon, an event," said Randy Falco, president, NBC Universal, standing at the bottom of the skating rink in Rockefeller Center, where NBC threw a lavish party after its upfront sales pitch to advertisers at Radio City Music Hall. "You don't even have to be in this business to know what an upfront is," he added, pointing to throngs of onlookers staring down at the party from the plaza above. "They all know."
Indeed, earlier in the day, Mark Burnett, the reigning king of unscripted programming, told NBC's "Today" co-anchor Matt Lauer during a live interview that he was in town for the upfronts, and Mr. Lauer didn't even bother to explain to the audience what that meant.
"Everybody knows," said Chris Pearlman, VP-integrated sponsorship and marketing, Premiere Sports & Entertainment.
In fact, the upfront presentations are no longer just for the benefit of marketers. The broadcast networks see the presentations as a way to polish their images with Wall Street and viewers.
Michael Gallant, media analyst at CIBC World Markets, said investors put a lot of stock, literally, in the upfronts, scrutinizing them for any action that could move shares. "It's important. We look at it very closely in our business," he said.
In a report last month on the "upfront tyranny," analysts Tom Wolzien and Michael Nathanson at Sanford C. Bernstein & Co. wrote that networks are feeling increasing pressure to deliver numbers in the upfront to show the press and Wall Street the strength of their companies and of the ad market.
They cited one unidentified senior executive at a media conglomerate who worried he'd have to make decisions, such as what percentage of the season's inventory to offer in the upfront, based on what was best for the stock price rather than what is best for his business. Messrs. Wolzien and Nathanson noted a network could hold back inventory in hopes of getting higher prices during the season in the scatter market, as networks did in the 2001-02 season. But even if a network believes it could maximize revenue by holding back inventory for scatter, it might be reluctant to reduce its upfront inventory for fear that the business press and Wall Street would interpret a lower upfront take as a sign of weakness.
So networks are stuck in a box, pressured to report ever-higher upfront numbers-even though those figures bear little reality to actual revenue. (Last spring's network upfront figures were up 15%, yet actual season-to-date prime-time revenue for ABC, CBS and NBC is up just 5.8%, according to the Broadcast Cable Financial Management Association, a trade group.)
As Messrs. Wolzien and Nathanson wrote: "The upfront is hardly an indication of end results." But in the upfront circus, networks must put on a big show.
This year, the entertainment of choice among the networks was rock `n' roll, obviously influenced by MTV's first upfront last year, which was essentially a full-bore rock concert. The WB opened with a set by Lenny Kravitz; UPN with Usher; and Fox had Phantom Planet, a band whose music is featured in its hit show "The O.C." CBS, the mature network, surprised its audience with a closing set by The Who. According to network executives, these acts were hired for a song-in fact, only their expenses were paid for. The artists did them for the publicity and because they were associated in some way with the programming. According to upfront organizers, the catering is the most expensive part of these events.
It wasn't always that way. In the early 1950s, there was no so-called fall TV season-new shows rolled out all year round. ABC is credited with launching the first fall season in 1962, when the then-upstart network came up with a gimmick, premiering all its programs during the week after Labor Day. NBC and CBS soon followed, which led to the institution now known as the fall TV season. By the early `70s, the networks had perfected the art of selling inventory at big upfront gatherings.
According to Arthur Schriebman, exec VP-negotiating strategies at Interpublic Group of Cos.' Initiative Media, the upfronts became the huge events they are today simply because more people are invited. "People found out it's a good party and they want to show up, even if they are not directly related to the business," Mr. Schriebman said. "In the old days, there probably were not as many journalists either. Ad Age was there every year, but not `Entertainment Tonight."'
But can it truly be said that the upfronts are part of popular culture now?
"I really don't know how much of the upfront has entered the vernacular," said George Schweitzer, exec VP-marketing, CBS. "I still have to add the word to my spell-checker."
contributing: bradley johnson