Fox revenue in upfront expected to swell 16

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With the broadcast prime-time upfront poised to hit $8.65 billion, the largest revenue gains will be reaped by News Corp.'s Fox.

According to an informal Advertising Age survey of media buyers and sellers, Fox's take will jump 16% to $1.55 billion, buoyed by reality shows "American Idol" and "Joe Millionaire," which rocketed the network to its first major February sweeps win. Fox is up 8% in adults 18 to 49 for the season and came within a whisker of toppling industry leader NBC in the adults 18 to 49 demographic.

General Electric Co.'s NBC, the perennial leader, will rake in far more ad dollars than Fox in the upfront, $2.55 billion, the survey found, but its total will be down 4% from last season's $2.65 billion. The peacock network saw its ratings fall 17%, primarily due to surging Fox. Still, NBC will be well ahead of the other networks, primarily because it attracts hard-to-get higher income, light TV viewers. Depending on NBC's sellout levels, it could recoup revenue and add money in scatter.

AOL Time Warner's WB and Walt Disney Co.'s ABC should see a 13% to 16% jump in overall revenue. Viacom's CBS will be slightly up and its UPN network flat.

overall rise

Overall, the survey found the prime-time network upfront market will rise a brisk 7%, a more aggressive forecast than even a few weeks ago (AA, April 21). The strength will also carry over to other dayparts, with cable ad sales predicted to increase 12% to $5.13 billion; syndication sales to climb 18% to $2 billion; and non-broadcast prime-time dayparts-news, late night and early morning-to notch a 4% gain to $2.6 billion.

Cost-per-thousand viewers for the broadcast upfront should rise between 7% to 12% depending on the network, according to the survey, beating last year's performance by a few percentage points.

Network executives will probably start negotiations at low-double-digit increases. But if they stay at that level, media buyers may balk. "It's all fluid," said one veteran media agency executive. "If they don't keep it in the high single digits, it'll go into cable. And in cable, we'll find someone who'll cave."

Networks won't sell as much inventory this year in the upfront. A year ago, networks depleted nearly 90% of their respective inventory supplies, leaving them little to sell in what became a hot scatter market with CPMs 40% higher than the previous June's pricing.

"There is going to be correction here," said Lyle Schwartz, senior VP-national broadcast research for WPP Group's Mediaedge:cia, New York. "Upfront was a bargain in relation to scatter."

Some media analysts believe as a result of that miscalculation the four big networks missed out on some $20 million to $40 million per quarter of revenue this season. They don't want to make the same mistake again.

ABC ratings up

ABC should pull in 13% more revenue to reach $1.7 billion. Though the network sits in fourth place overall, it's posted a 3% ratings gain among adults 18 to 49 this season.

CBS pricing will be up about 5% to almost $ 2 billion. Media executives expect the network to sell less in the upfront, strongly believing that it-more than other the networks-will not want to miss out on a potentially more lucrative scatter market. Its ratings among adults 18 to 49 are down 3% for the year.

Media executives predict the WB to pick up 14% in new revenue, bringing its upfront total to $605 million, up from $530 million the year before. UPN will remain flat at $240 million.

Media executives predict reality shows will make up almost 30% of all network summer schedules. Then in the fall, executives believe networks will use reality shows as quick replacements for failed network scripted shows.

But the prevailing wisdom is that the networks will return to scripted programming. "It'll stay at parity," said Sharianne Brill, VP-director of programming services for Aegis Group's Carat North America. "Viewers will rebel as well advertisers. A quality script series is backbone of any network."

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