Media Decoder: Sooner Than Expected, CBS Largely Finishes Upfront Sales

Word that CBS, part of the CBS Corporation, was finishing up came on Friday afternoon, a week after a network spokesman described the network as “in active negotiations” with advertisers and agencies.

Late on Wednesday, CW, which is owned by the CBS Corporation and Time Warner, became the first major English-language broadcaster to cross the upfront finish line.

The upfront market is called that because the sales take place before the start of the coming season. Industry analysts are predicting that the five big broadcasters — ABC, CBS, CW, Fox Broadcasting and NBC — will struggle to match the estimated $9.2 billion worth of commercial time they sold last spring in the 2012-13 upfront market.

The analysts cite factors like ratings erosion, the bumpy economy and intensifying competition from rivals like cable television and online video.

That CBS is concluding its upfront sales is a bit unexpected because some Web sites of trade publications reported on Thursday and Friday that the 2013-14 upfront market had turned sluggish, slowed or was even approaching an impasse. (Indeed, if this article were to have run decades ago in, say, Variety, it might have carried a headline like “Eye Surprise,” after the CBS logo.)

The rates CBS is charging advertisers for the 2013-14 season — known as c.p.m.’s, for the cost to reach each 1,000 viewers, a standard measurement in the television business — are estimated to be increasing by an average of 7.5 percent. By contrast, in the upfront market last year, estimates were that CBS was able to raise c.p.m.’s an average of 8 to 9 percent.

Analysts also predicted that c.p.m. increases would probably be lower during the 2013-14 upfront market than they were in the 2012-13 upfront market.

Before the current upfront market began, Leslie Moonves, president and chief executive of the CBS Corporation, said he was anticipating that CBS would obtain c.p.m. percentage increases in the high-single-digit to low-double-digit range when compared with last year. Seven and a half percent does qualify as a high-single-digit gain.

Turning to the volume of commercial time sold, estimates are that the CBS total will be about $2.5 billion to $2.6 billion — and perhaps closer to $2.5 billion than $2.6 billion — compared with estimates last year that the network took in $2.5 billion to $2.75. (The numbers are not more definite because during the season,advertisers can usually cancel their upfront market commitments without penalty.)

CBS is selling about 80 percent of its commercial inventory in this upfront market, holding the rest back to sell during the course of the 2013-14 season in what is referred to as the scatter market. That is slightly higher than what CBS did in last year’s upfront market, when it sold 77 to 78 percent of its inventory.

CBS plans to add six series to its prime-time schedule for 2013-14, five in the fall and one in midseason.

With CW and CBS wrapping up their upfront sales, that leaves ABC, Fox Broadcasting and NBC to continue making deals with advertisers and agencies.

Article source: http://www.nytimes.com/2013/06/08/business/media/sooner-than-expected-cbs-largely-finishes-upfront-sales.html?partner=rss&emc=rss