Editorial: Networks face tough upfront

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Take it to the bank: Actual prime-time revenue for ABC, CBS and NBC declined in the fourth quarter despite a strong economy and ad market. It was a tiny drop-down $486,000 (to $1.66 billion), about the reported price of 30 seconds on NBC's fading "ER." But it's a sign of network TV's troubles. All this puts buyers in a strong position to drive deals in the coming upfront market.

Prime-time household ratings this season are down at every network except ABC, according to Nielsen.

Prime-time revenue fell in the third and fourth quarters, marking the first time since the 2001 recession that the revenue fell two quarters in a row, according to data from the Broadcast Cable Financial Management Association, which collects actual ad revenue figures from the three networks. It's not all bad news for networks. Overall revenue for ABC, CBS and NBC jumped 12% to $11.7 billion in 2004, passing 2000's peak for the first time. But overall fourth-quarter revenue, dragged down by prime time, rose a dismal 3%.

Networks soon will begin their upfront puffery, proclaiming how advertisers must pay more to get the nets' mass of viewers. It's time for a reality check.

The upfront should not be confused with revenue. In the 2003-2004 upfront, ABC and CBS and NBC snared prime-time commitments totaling $6.9 billion for about 84% of their time, holding back the rest to sell during the season. What was their actual prime-time revenue for the season? Just $6.2 billion, according to our analysis of BCFM data.

TNS Media Intelligence estimates show TV's share of measured media spending fell to 47.2% in 2004 from 48.6% in 2000. There has been a decided share shift within TV, with network falling and cable gaining. Viewers have alternatives to network TV-cable, the Internet. Advertisers, too, have alternatives. Network TV is not going away, but broadcasters no longer call the shots. Maybe we need a new name for the upfront market. Call it a buyer's market.

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