A CYNOPSIS MESSAGE FROM NBCUNIVERSAL

Cynopsis Media Presents: Upfront Broadcast Market
05/16/13

by Daisy Whitney

Like the economy, there’s a bit of a sluggish sentiment on the part of buyers heading into the annual TV ad selling season. With prime-time ratings down year over year and a tepid marketplace, expectations are for a mostly flat finish. While the dollar take will vary widely depending on the network, TV is likely to round out the annual buying season down about 1% over last year, says Brian Wieser, Senior Research Analyst with Pivotal Research Group, an equity research firm focusing on communications and media. “Based on talks with buyers and sellers and getting a sense of where they think the total volume will shake out, it feels like a blah market,” he says.

A CYNOPSIS MESSAGE FROM NBCUNIVERSAL

That sentiment comes in part from lower ratings but also because advertisers are still cautious about spending widely again. The reality is that businesses have learned to live with a 1.5% to 2% economy. While the market isn’t stuck in the dark days of 2008, no one is singing “Happy Days are Here Again,” either.

There are some positive signs, though. While the scatter market has been fairly soft, it has started to pick up again in the second quarter (though some say that’s simply a reaction to low supply and poor ratings). In addition, broadcasters are aggressively developing a wide range of new shows for the fall, and the potential lineup seems promising to buyers and industry observers.

Advertisers to TV Execs: Where is the Next Modern Family?

Ad buyers are eager for a big hit, even though they’re hard to find especially as viewership has become more diffuse across broadcast and cable, as well as online and via digital platforms. “There are fewer hits and some of the aging shows are aging faster than people want,” says Todd Gordon, Executive VP and US Director at Magna Global, with clients including Hyundai, KIA, Hasbro, USAA, and Sony. “It’s hard to sustain the big audiences when it’s so competitive and there are so many new shows.”

The market hasn’t seen a Modern Family level of buzz since that show debuted 2009, and buyers are eager to hear about that sort of a potential hit at the presentation. “Everyone is developing really aggressively in an effort to get that audience back. The market is still vibrant and we still think of TV as a strong a medium,” Gordon says. “I hope we see some shows we want to tell our friends and family about.”

I SEE, SAYS CBS

As in recent years, CBS remains in the strongest position. “The leader in terms of dominant share of gross ratings points in the prior year usually has the strongest share of volume and highest pricing in the following year’s upfront and that would be CBS,” Wieser says. Specifically, he’s expecting about a 7% CPM increase for CBS with other networks’ CPM increases to come in at between 4% to 6%, and leading national cable networks to fall in this range as well.

CBS has the fewest holes in its schedule and will likely replace no more than five shows – after all, it has the number-one series in scripted television with The Big Bang Theory and has made stellar creative deals with its somewhat aging jewel, The Good Wife. To stem the tide, it has already announced three dramas: Reckless, a legal series, Hostages with Toni Collette and Dylan McDermott, and Intelligence, with Lost‘s Josh Holloway, in addition to four comedies, which include Mom, from Chuck Lorre Productions and Warner Bros. Television and starring Anna Faris; The Millers, starring Will Arnett; Crazy Ones, starring Robin Williams and Sarah Michelle Gellar; and We Are Men, starring Tony Shaloub and Jerry O’Connell. Les Moonves, CBS President and CEO, declined to issue his yearly prediction, but did say he expected an increase in dollars. “Last year, I said double-digits and we only had nine. The year before I said double-digits and we had 12 to 13,” he said during an earnings call.  CBS has also benefitted from scatter pricing that’s up double digits over last year’s upfront pricing, and Moonves expects that to translate into a premium in upfront pricing.

A CYNOPSIS MESSAGE FROM NBCUNIVERSAL

THE FUTURE OF FOX

Other broadcasters face more challenging markets. Though American Idol is still strong, Fox needs a plan for what will happen when that show runs out (the show’s last original judge, Randy Jackson, announced his departure last week and at press time, Fox said that shifting to a three-person judging panel was “likely”).  The network had some success with its Tuesday comedy block with three of four series returning: New Girl, The Mindy Project and Raising Hope. The Following has also done well since its mid-season January launch.

At its upfront on Monday, Fox chairman Kevin Reilly admitted that while last year was not Fox’s best, he trumpeted what he called his team’s “year-round original programming” strategy. One tenet of that includes ordering varying numbers of episodes instead of the typical twenty-two, and Fox is clearly investing more in programming than it did last year, betting on five new comedies (including Brooklyn 99 starring Andy Samberg and the first live action comedy from Seth MacFarlane, Dads), as well as Fox’s first event series, new unscripted series and new animated series. “Fox should pick up a new edgy action adventure drama featuring a key central character, backed up by a strong ensemble,” says media strategist Shari Anne Brill, who heads up consultancy Shari Anne Brill Media. Bingo: Fox unveiled four dramas, including Wayward Pines (from FX Productions) – a thriller starring Matt Dillon as a Secret Service agent unraveling a mystery in an Idaho town – in which nothing is what it seems. What sort of difference it makes to advertisers in this tough a market remains to be seen and Fox remains watchful. “We take our competition very seriously,” promises Toby Byrne, Fox’s President of Sales.

THE ABC’S OF ABC

ABC, which finished last season claiming six of the top 20 broadcast dramas for the season in Adults 18-49, is prepping fourteen shows to premiere in 2013/2014. The pickups with the most buzz so far are Marvel’s Agents of S.H.I.E.L.D.S. from Joss Whedon, as well as the comedy The Goldbergs, from Adam Sandler’s Happy Madison Productions and Sony Pictures Television. “ABC delivers the best of broadcast with the dynamics of digital,” said President of Ad Sales Geri Wang at the Upfront. She was specifically referring to “Watch ABC,” the net’s platform for both on-demand playback and live network television streaming, as well as ABC Unified, which allows advertisers to buy all screens  TV, online, and mobile, in one swoop. “We make it easier,” said Wang, “for advertisers to plan, buy, and reach their audience.” One noticeable risk that ABC is taking is an all-new Tuesday night lineup without any familiar shows to anchor the evening and lure viewers: Agents of S.H.I.E.L.D.S., The Goldbergs, Trophy Wife, and Lucky 7.

A CYNOPSIS MESSAGE FROM NBCUNIVERSAL

NBC Looks for Laughs

NBC Entertainment Chairman Robert Greenblatt describes the last year as a “roller coaster” for the network, and remarked that he was happy that NBC is now tied with Fox for second place. “We were the only ones who ended the season flat,” he added at the Upfront on Monday.  Brill comments that NBC especially needs comedies to boost its Thursday night lineup so it’s less dependent on The Voice and NFL Football. And, in fact, NBC has just announced four new entries: The Family Guide, Welcome to the Family, About a Boy, based on the 2002 hit Hugh Grant movie and Sean Saves the World, from actor and Executive Producer Sean Hayes. Some media buyers have said that the real comedy winner, however, that they think will entice eyeballs and ad dollars, is The Michael J. Fox Show, loosely based on the life of the actor who has battled Parkinson’s disease for more than twenty years.

There’s no doubt that NBCUniversal has a lot of toys to play with when it comes to pleasing the clients, thanks to its many brands, including E!, Telemundo, and Bravo. At the Upfront, in fact, NBCUniversal Advertising Sales President Linda Yaccarino compared leveraging the NBCUniversal portfolio, with the broadcast network at its center, to playing a symphony. She told Cynopsis after the presentation that advertisers were particularly interested in all the promotion opportunities that she and her team are able to provide – an advantage that few of her competitors have, to such an extent.

Nice to see you, CW

The CW has been aiming to expand beyond its youth roots as it did the past season, and that focus will likely continue. The network has eight shows in development, with pickups to be announced today. To date, CW has already picked up Arrow, The Vampire Diaries and Supernatural for next season. Expect the network to continue pushing digital offerings. CW President Mark Pedowitz has said that digital venues account for 20% of its total viewing audience.

The Question of Cable

Networks are realizing how serious the competition from cable networks is especially when a show like AMC’s The Walking Dead can deliver huge numbers, Brill says. As a result, many are now aiming for shows with a touch of the fantasy, an area that’s already performed well with NBC’s Grimm. Shows in development that follow this trend include ABC’s Gothica that incorporates mythology from Dr. Jeckyll and Mr. Hyde, Frankenstein, and Dorian Gray.

“Other fantasy shows in development include dueling shows about Alice in Wonderland, shows where deceased loved ones show up on your doorstep as if nothing happened, vampires, comic book superheroes and assorted other supernatural and psychological dramas and thrillers,” Brill says. She also notes that several networks are looking to schedule original quality scripted content year-round. That includes CBS’s airing this summer of The Dome, about a town that gets sealed off from the rest of the world by a huge transparent dome. Fox is developing several event-type series including one on OJ Simpson and a remake of the miniseries Shogun, she adds.

Broadcasters are recognizing that an audience has become agnostic about where they view their shows, so they’re developing accordingly, Brill says. “Viewers don’t make a distinction between cable and broadcast; they simply look at who is putting on the best programming,” she says. They’re also becoming more agnostic about online streaming, for that matter. That’s why advertisers are focusing energy and dollars in digital video in addition to TV. EMarketer has pegged online video advertising at $4.1 billion and it should more than double over the next three years.  But whether the growing strength of the online video market impacts the dollar take for broadcasters at the upfront remains to be seen.

Later,
Daisy Whitney
05.16.13

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