Upfront uncertainty starts early
Unresolved issues, changes still lurking
Myriad unresolved issues and changes hang over the process, when media buyers will plunk down cash for up to 80% of the TV season's primetime ad dollars.
Among the likely points of conflict:
- The CW. What does the merger of the WB and UPN mean for ad rates?
- The TiVo Nation. With DVR penetration estimated at 8% of households and growing, the networks want to be paid for shows played back at a later date, but will the agencies buy it?
- The Olympics. NBC is headed for another fourth-place finish, but will the Winter Games prove enough of a promotional vehicle to improve the Peacock's position for the fall?
- The "Idol" Factor. In its fifth season, the Fox juggernaut is destroying everything in its path. How does that affect the market for shows in the second half of the season?
When Leslie Moonves and Barry Meyer brought together UPN and the WB, they fused programming that earned $375 million and $675 million, respectively, in last year's upfronts.
Moonves says he expects the CW to be profitable in its first year, but because ad inventory will be cut nearly in half and some viewers will get lost in the shuffle, the new net is unlikely to take anything close to the $1.05 billion they took last year.
"You've got to assume 'Veronica Mars' will do slightly better; it probably won't do worse," says Brad Adgate, senior veep and director of research at Horizon Media. "We have to figure out what the impact will be on overall delivery."
Even if the CW is able to hang on to most of the UPN and the WB auds, there will still be several hundred million dollars targeted at the 18-34 demo in play.
That could prove manna for cable, which for once didn't take any viewers from the networks last year.
But some analysts wouldn't be surprised to see ABC, Fox or NBC make a run at those dollars by adding some young shows for next season. And all this assumes the dollars stay in TV and aren't poured straight into online advertising.
The opening salvo aimed at the upfronts came in November when all six broadcast nets gathered at NBC U headquarters at 30 Rock in Gotham to tubthump new data that showed DVR viewers watch 12% more TV -- most of it network primetime TV.
Now the nets are angling to have shows that are recorded and played back within a week counted in their ratings totals, even if they are sold at a discount to a live viewer.
The nets' position was strengthened in December when Nielsen Media Research collected playback information.
"Our position is you start with the full audience, then when all the research is in, we discount a certain percentage for the playback people," says CBS chief research officer David Poltrack.
The agency response was swift and nearly as unanimous: No way. Buying firm Magna Global was first out of the gate, saying that playback ratings for DVR are a non-starter for the 2006-07 season. Buying firm Carat added its voice to the mix last week, arguing the agencies already pay for shows recorded on VCRs -- despite an absence of data on which shows ever get played back.
VCR penetration is near 90%, enough to move network ratings a point, in some cases, and is far more significant than DVR use.
The DVR struggle is likely to become just another deal point in the talks, where everything is negotiable.
NBC is hoping its hand is strengthened enough by the Winter Olympics that it won't take too bad a hit against what looks like another fourth-place finish. During the games, NBC will be promoting new series "Conviction," "Heist" and "Teachers," as well as another season of "The Apprentice" on Mondays and the move of "Las Vegas" to Fridays.
After the Games end on Feb. 27, those shows -- along with NBC's Thursday night --will have two months to show they can stand on their own two feet and generate some momentum for the upfronts.
The Peacock is going to get a lot of help on Sunday night next season, when it carries NFL games, the perfect counterprogramming to ABC's female-skewing hits, while the 35-year-old "Monday Night Football" franchise moves to ESPN.
Weighing heavy on the minds of buyers and sellers is the "American Idol" phenomenon and the increasingly two-part season it represents. Advertisers still buy an entire season of shows, but buyers may demand a midseason discount for everything that falls in Simon Cowell's path.
Unless, that is, they believe "Idol" is having its last hurrah.
"Yes, it's having a great year, but eventually things start to age and dwindle," says one ad exec. "The auditions are interesting, but once the singing starts, people start to drop off."
