Night and Day

The broadcast networks have sold the remains of the day. Last week, CBS, ABC, and NBC sold $2.9 billion in advertising for morning, daytime, and late night during the upfront market, the pre-season sales period when the bulk of TV time is sold. The non-prime upfront cash-out is up 4% from a year ago.

The networks report that they sold 85%-90% of their non-prime time inventory in the upfront.

In the prime time upfront, which is essentially over, sales were basically flat at $9.3 billion.

One senior agency executive says non-prime ad dollars were up, but the networks offered smaller price increases, compared with prime time, to drive sales. Last year, non-prime upfront prices rose 10%.

Despite its woes in prime time, ABC remains the demographic market leader in daytime, and its $410 million in sales and 4%-5% rate hikes reflect that. CBS, tops in total viewers in daytime, wrote up sales of about $365 million, up 3%. NBC, with only two hours of daytime programming, sold about $160 million.

There was at least one eye-opener out of prime. For the resuscitated CBS Early Show,
the gains were impressive. It reaped a 50% boost in ad sales to $150 million, largely due to substantial audience growth over the past year. Ratings leader Today sold $425 million in the upfront market, up 10%. Good Morning
was up about 11% in total sales to around $250 million.

The softest of the non-prime dayparts was late night, but that's a perfect example of supply and demand. CBS and NBC earlier got affiliates to give up late-night local ad positions to help the networks pay for the NCAA basketball package and Olympics, respectively, so those networks have more inventory.

ABC President of Sales and Marketing Mike Shaw knew going into the market that there would be a glut of time in late night and that pricing would be flat. "I think you'll see those extra rating points get sucked up in the scatter market," he says.

NBC was claiming $1.2 billion in total network sales outside of prime time, up 3%. ABC posted $900 million, and CBS totaled $850, both up about 5%.

ABC, CBS, and UPN wrapped up prime time sales last week. ABC sales totaled $2.1 billion (including $600 million in prime time sports and sales for special events like the Oscars, which are sold separately), down about $300 million from 2003. The dollars that ABC dropped shifted to CBS, which collected $2.4 billion, up $200 million, and to UPN, which increased to $400 million, a $100 million jump.

As for cable, its upfront take totaled approximately $6.3 billion, up 15% from a year ago. That puts total network upfront sales (all dayparts for broadcast and cable) at $19.1 billion, up 4% from 2003. The new spending, it appears, is going cable's way.

Prime time rate increases averaged approximately 7% across the networks in this year's upfront. But, with the other dayparts factored into the mix, the average price increase across network TV was about 5%.

Cable price hikes are also up about 5% overall, according to the head buyer of broadcast time at a major New York ad agency. "That's a lot more tolerable than the double-digit increases we paid last year," the buyer says.

The pricing was no fluke. Mediacom Senior Vice President Peter Olsen says that buyers spent the pre-upfront planning process figuring out ways to prevent a repeat of "last year's runaway inflation."

In syndication, the market was proceeding last week at the same kind of deliberate pace as the network market. According to buyers, the syndicators initially sought double-digit rate increases, but many backed down to rate hikes in the high single digits, in some cases even less. The top sales executive at one studio-owned syndicator takes the long view: "That's what a negotiation is. We have a pricing level, and they have a pricing level, and you find something that's in between."

That dance should continue this week and possibly spill into the week after that.