A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

Cynopsis Media presents: 

Broadcast Market

05/16/11

Good morning. It’s Monday, May 16, 2011, and this is your this is the first installment of this special five-part series on this year’s Upfront season. 

BROADCAST UPFRONT:  TOUGH TO PREDICT

By Daisy Whitney

Tick tock.

The upfront presentations by broadcast networks begin today, but as of late last week many marketers had yet to finalize their budgets. That slowness is an artifact of the more cautious budgeting process during the recent recession, but it’s not likely to go away. Many buyers are anxiously awaiting final numbers from clients so they know what they can spend in TV programming this year.

That’s just one reason why market predictions are tough to make. Other reasons include worldwide political and economic issues. “Although ad spend overall is going in the right direction, many international and domestic factors, such as the crisis in Japan, Middle East unrest, the U.S. unemployment rate, are all impacting consumer outlook and will ultimately affect ad spend,” said Donna Speciale, President of Investment, Activation and Agency operations at MediaVest.

Barclays Capital has said to expect 7% to 8% growth this year for broadcasters with CBS locking in the greatest price increases. During a recent earnings call CBS CEO Leslie Moonves said the ad market heading into the upfront was a “highly favorable climate,” due in part to scatter buys being up 40% in the second quarter compared to last year’s upfront.

Buyers are more circumspect. The scatter market peaked a few weeks ago and has been shrinking since then, they say. Also, buyers point out that high prices at the pump can affect consumer confidence, as well as brands’ bottom line because many brands rely on oil to ship products. 

There is also the question of how much money advertisers will apportion to upfront buys. “While the economy has certainly improved, it’s not quite where everyone wants it to be,” said Todd Gordon, Senior VP and Managing Director, National Broadcast at Initiative. “All the issues with commodity prices have put pressures on margins and those are the kind of things that make it more difficult for clients to spend as much as they much want.” That being said, the upfront is likely to be up over last year, but by how much and how big of a shift from scatter to upfront is still unknown, he said.

But it’s also vital that the increased money advertisers are spending in the upfront be connected to bottom line results. Gordon said marketers increasingly want data that correlates ad sales on TV, and other mediums, to increased sales of their products. Another overhang is the possibility of an NFL strike, which may affect how buyers shift dollars around. “It will affect much of primetime’s and cable’s inventory and pricing, and will also challenge every platform where advertisers have NFL marketing partnerships,” Speciale said.

A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

New Presidents, New Shows

The last twelve months has ushered in a new crop of network presidents at CW, ABC and NBC. This week’s upfront will feature their inaugural presentations, and buyers are eager to see what imprint these new development heads will be making on their networks.

Look for TV networks to unveil a slew of new comedies. “Comedy continues to be the holy grail. They are great for the network and for advertisers. Everyone is looking for their Modern Family,” said Jackie Kulesza, Senior VP and Video Activation Director at Starcom USA.

NBC will attempt to improve its ratings with its just released slate of six new comedies and six new dramas under new network head Robert Greenblatt, Chairman of NBC Entertainment. “I have a lot of confidence in Robert Greenblatt and they just need to figure out who they are going forward. If they succeed, that will be a good story for networks TV,” said Shari Anne Brill, one of Co-Authors, along with Steve Sternberg, of the just-released Upfront edition of the Primetime TV Insight Series report published by Baseline Intelligence. NBC’s doldrums are part of the cyclical nature of the business. Ten years ago, CBS was in a tough spot before Moonves began the network’s reconstruction with CSI.

Over at Fox, buyers are watching to see how Fox fares in comedies. The network has done well in animation and now has two powerhouse shows in Glee and American Idol. Drama is also vital to the network, and Fox has said publicly that live action comedy will be a top priority as it aims to build on the growing success of Raising Hope. Animation is also likely to be a strong genre for the network which has picked up episodes of the Jonah Hill animated comedy Allen Gregory and a Napoleon Dynamite show.

ABC has a new president in Paul Lee, who made his mark on ABC Family with many strong originals and will likely have a good vision for ABC in a post-Lost world, Brill said.

The CW announced early pickups of its top five shows in Vampire Diaries, Gossip Girl, 90210, Supernatural and Top Model. Outgoing president Dawn Ostroff will co-present with new president Mark Pedowitz at the upfront as both have played a role in the development slate.

Univision will also battle for upfront broadcast money. The network competes in the Spanish language market, but given its ratings and its scope also aims to go head to head for broadcast money. “It will be interesting to see how the big four networks include programming that caters to the growing Hispanic market. We should not be surprised to see Modern Family-like programming addressing this important segment,” said Tony Aguilar-Arellano, VP Media Services at media agency Acento.

A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

New Media

In addition to new shows, CW will likely tout its convergence strategy. The CW is the first network to test increased ad loads in its online shows on CWTV.com and has found that since the launch in September the number of unique viewers of full episodes on CWTV.com is up 59% season to date, and that 94% of the ads that are served in the full episodes are watched to completion, a promising number for advertisers.

On the new media front, some buyers want to see more aggressive pricing that’s more in line with broadcast pricing. Many networks are pricing their online inventory at significantly higher CPMS, making it tough for brands to participate as fully as they may want in new mediums like online video and VOD, buyers say.

Cable versus Broadcast

Cable networks like to point out that their ratings are rising and broadcast ratings are eroding. But during the broadcast season, the average broadcast show on the four major networks still outperforms the average cable show in ratings, Brill said. Plus, cable ratings may add up in the aggregate but individual network ratings can shift a lot. Among Adults 18-49 and 25-54, the five broadcast networks combined are down by only about half a rating point from last season, Brill said.

A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

This Upfront 2011 Special Edition and all previous Special Editions from Cynopsis Media are available to read or download after publishing here.

Later —
Daisy Whitney for Cynopsis
05.16.11

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