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Nets Post Price Gains in Upfront Deals

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Broadcast and cable networks are posting commercial price gains as more media companies finish their upfront negotiations.

The pricing is an indication that the market might have been stronger than expected. Despite ratings declines, it appears that demand for TV advertising has not diminished and that the volume of business will be little changed from last year.

Sales of digital inventory grew, as did the data-driven advertising that networks have been pushing for several years.

The Walt Disney Co.’s TV properties racked up ad-sales volume gains in the high-single-digit range, according to sources familiar with the situation. ABC racked up double-digit price gains on a cost-per-thousand viewers (CPM) basis. Digital spending was up 25%.

Viacom, which became more aggressive on price than in past years when its ratings tanked, drew mid-to-high single-digit price growth for its adult networks. Its kids’ networks, including Nickelodeon, generated double-digit price increases.

In its first upfront since acquiring Scripps Networks Interactive, Discovery had a big upfront.

“It will go down as probably one of the largest upfront ad revenue years that any cable network group has ever had,” Jon Steinlauf, Discovery’s chief U.S. advertising sales officer, said.

Discovery pushed for a big price increase for its Investigation Discovery network. Despite its high ratings among women 25 to 54, its ad prices have lagged since it was converted to a true-crime programming format. Overall, Steinlauf said he thought the upfront market was flat for broadcast, if you took out last season’s Olympics, and fairly flat for cable.

“Considering what’s going on in the market, I think holding volume is a sign of real strength,” he said, considering that the supply of ratings points is down and more digital competitors are offering video advertising.

Steinlauf said he also saw an increase in demand for Discovery’s data-driven ad products. Advertisers doubled their commitments to Discovery’s Engage platform, he said.

He pointed to one advertiser that tested Engage in the scatter market and got really good results. That advertiser increased its spending with Discovery in the upfront and put 30% of its dollars into Engage to reach advanced target.

“We saw a real turning point,” Steinlauf said.

The CW, Fox and CBS finished their upfronts last month. NBCUniversal is expected to discuss its upfront performance when Comcast reports its second-quarter earnings this week.

Jon Lafayette
Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.