A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

Cynopsis Media presents: 
Upfront 2012 – The Broadcast Market
05/16/12

Good morning. It’s Wednesday, May 16, 2012, and this is your final installment of this special series on this year’s Upfront season. 

BROADCAST UPFRONT

By Daisy Whitney

With the upfront presentations underway this week, nearly every broadcast network has a hole to fill in its lineup, but ad dollars should still be strong. By most accounts from Wall Street to Madison Avenue, the market will rise this year.

But don’t expect the big jumps of last year when advertisers were leaping back into the fray after recessionary pullbacks and volatile spending cycles. Instead, this year should bring small increases that go along with the stable ratings on broadcast networks.

Barclays Capital analyst Anthony DiClemente predicted that broadcast upfront revenue would rise 4.3 percent over last year, with cable money to grow 6.3 percent. That will bring primetime ad sales for the broadcast networks to $9.49 billion and cable’s haul to $9.88 billion.

The rate of growth is down a bit from last year’s market, which saw broadcasters boost ad dollars by 5% and cable by nearly 15% for an overall 10% market gain.

“The market is in balance and that’s a pretty rare thing. There’s inventory available, ratings are holding up well and relatively speaking it’s been a strong season,” said Todd Gordon, Executive VP and US Director for MagnaGlobal. “That should be a relief to everyone because the inflation in the last few years isn’t sustainable for the clients. They can’t raise prices that fast to compensate.” The auto category continues to be strong, and ad spending growth should also come in insurance, financials and wireless, among others, he said.

A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

Up, But How Much?

Not all networks will earn big increases, though. CBS will lead the pack, buoyed by its ratings and schedule. “From our conversations with media buyers and sellers alike, we expect the traditional activities to generate volume growth for broadcast networks of between 0-5%, which per our proprietary model will equate to 8-10% pricing increases for CBS, with slightly lower pricing for each of Fox, ABC and NBC,” said Brian Wieser, Senior Research Analyst with Pivotal Research Group in a recent report.

Likewise, the TVB expects low single digit increases for the upfront in the 2% to 4% range, with CBS and Fox on the high end, ABC in the middle and NBC on the lower end, said Steve Lanzano, TVB President and CEO. “Everyone understands that what we’re talking about is a slow growing economy, and you will still have very cautious advertisers because any event can turn everything upside down. I would say it’s a cautiously optimistic view, and views are short term rather than long term. They play out each month and each quarter and advertisers want to be as flexible as possible. But consumers are starting to spend again,” he said.

CBS CEO Les Moonves issued his yearly upfront prediction earlier this month in an investor call. He said he anticipates a healthy upfront with double digit CPM gains for CBS. “We led the (upfront) last year and we guarantee we will lead it again this year,” he said. Univision also expects a strong market, buoyed by its rising ratings, youthful demos and continued organic growth in its audience. “We had a tremendous year,” said David Lawenda, President, Ad Sales & Marketing at Univision. The network regularly finishes among the top broadcast networks in primetime each night. It’s also gaining new advertisers in nearly all categories.

A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

A Social Year

Digital and its myriad of extensions may not play a huge role in the upfront itself, but the power of social media will linger in the backdrop. ‘It is a big year for television and I’m not just talking about the first screen but content across all screens and whether programs resonate with viewers,” said Shari Anne Brill, President and CEO of media strategy consultancy Shari Anne Brill Media and author of the Primetime TV Insight Series report published by Baseline Intelligence.

Social media has garnered so much buzz this year as a factor in TV success and while it doesn’t create an audience it can get viewers more engaged, she said. Networks are paying closer attention to the type of social chatter they’re driving.

A CYNOPSIS MESSAGE FROM TURNER ENTERTAINMENT NETWORKS

Holes to Fill

Nearly every broadcaster has a hole, or two, to patch in its lineup. But this past season has already delivered promising freshmen hits for Fox with New Girl, CBS with 2 Broke Girls, and NBC with Smash. Media watchers will pay close to attention to how the new fall lineups will balance out each network’s needs.

While Fox landed a hit in New Girl, the network still has its work cut out finding new dramas, Brill said. With House leaving and Fringe on the way out, drama is even more vital for Fox. American Idol is still a ratings juggernaut, even with its numbers down this year. Copycats beware though – just because it’s been a hit doesn’t mean audiences wants 20 permutations of singing shows, Brill warned.

NBC has a tiny bit of breathing room thanks to the continued success of The Voice and the newfound hit in Smash, already renewed. “Smash is so different from anything that’s been on NBC and anything that’s been on network TV,” Brill said. “[NBC Entertainment Chairman Robert Greenblatt] is a real programmer’s programmer. If you let programmers be creative they can do their thing and we can have a great renaissance for TV.” NBC has struggled with ratings and unearthing new hits of late, but it has the benefit of the summer Olympics as a promotional platform to launch new fall shows.

Modern Family anchors ABC’s comedies, but the network is saying goodbye to powerhouse drama Desperate Housewives, and Private Practice is losing ratings momentum, so ABC will be on the hunt for a fresh slate of dramas. The network would benefit most from a drama that attracts a more even gender mix, Brill said. She added that new show Once Upon a Time’s success has been a pleasant surprise.

The CW has had less luck with its new shows this past season, so in the fall it’ll need to round out its lineup around renewed regulars The Vampire Diaries, Supernatural and 90210. Like ABC, the CW should also find a drama that appeals to young men, Brill said.

CBS is in the best spot, but the CSI franchise is starting to age so the network should be looking ahead to replacing it down the road, Brill said.

One Hit

Some broadcasters have a ways to go in developing and nurturing new programming. But, experts say all it takes is one hit and a network can start to turn around. Overall, ad buyers say they’re encouraged by the broadcast development slate and the wide variety of projects across genres.

Later —
Daisy Whitney for Cynopsis
05.16.11

Cynopsis Ad Sales:
Mike Farina – VP/Sales and Marketing – 203-218-6480 / [email protected]
Classifieds – Trish Pihonak- 888-702-3858 / [email protected]

To subscribe to any Cynopsis edition(s) click here.
To unsubscribe from this edition, click here.

Cynopsis Media, a division of Access Intelligence
65 Lantern Road
Stratford, CT 06614
Ph: 888.702.3858
Fx: 203.386.8855

Copyright Cynopsis 2012

All outgoing e-mails are scanned and sent out virus free. Copyright Cynopsis 2012