/// With Broadcast Volume Down, TV Inventory Is Going to Get Expensive

June 29, 2014  |  Media Week

If everybody waits out this upfront for better inventory in the fall, will anybody get enough of it? Brian Wieser, analyst at Pivotal Research (and a former head forecaster for Magna Global), said he’s predicting volume decreases on the order of between 5 percent and 10 percent across what was a $9.25 billion upfront bazaar last year (where networks saw strong interest in upfront commitments), which was followed by a weak season. That puts the upfront haul (which is, of course, largely theoretical anyway—clients can cancel up to 25 percent of their commitments) comfortably south of the $9 billion mark. But it also means more of the real buying will get done after the season’s hits are established, and at a hefty markup. “Scatter is going to be pricey,” said one network exec flatly. Don’t confuse this talk with the CPM gains networks tout during the upfront —those can be valuable, but they can also be a smokescreen when dollar volume is down. “We’ve had a couple of years where it seems like all of the scatter business was pushed into the upfront markets, and that, surprisingly, continued into last year from the year before,” explained Wieser. “Because [the trend] didn’t break last year, we had virtually no volume in the scatter market [since new shows couldn’t deliver the ratings].” Clients, Wieser said, are asking themselves why they’re putting so much money down in the upfront when that money just gets redistributed at midseason to atone for underdeliveries. Why not hold back that money and spend it when it’s clear what the hits are, rather than have money languish at a network where your customers aren’t watching? Well, buyers are about to find out whether or not the trade-off—better shows for higher prices—is worth it. “‘Why don’t we look to see what pops up in the middle of the year and whose seasons are strongest?’” Wieser asked rhetorically. The glum ratio of hits to misses isn’t new—even the networks themselves joke about how bad it is—so if you don’t have to lock in your buys, why bother? But if every advertiser decides that this is the season to cut back on upfront budgets and put the remaining cash into scatter inventory on the season’s established hits, scatter pricing is going to go through the roof.

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With Broadcast Volume Down, TV Inventory Is Going to Get Expensive



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