Monday, December 22, 2008

Buyers Ask Networks for Deals, Nets Refuse (for Now)
Dec 22nd, 2008

Media buyers are asking TV networks to reduce pricing - both in the scatter market and for ad time booked during the upfront - but the networks are saying there’s enough demand in the market that such discounting isn’t necessary.

“While we recognize the concern in the marketplace, our clients continue to receive excellent value from our partnership and their upfront deals,” Jon Nesvig, Fox Broadcasting’s president of sales, is quoted as saying in TV Week. Nesvig says there have been no renegotiations, pointing out that, in fact, the network’s scatter market in fourth and first quarters has been at or above upfront pricing.

That may change, however, if the economy continues to worsen. One buyer, having heard that many clients plan to exercise their options to cut back upfront buys by as much as 50%, predicts the second quarter will be a “disaster.” Just how bad breakage in the second quarter will be should be apparent by mid-January, as that is when advertisers usually need to let networks know their cancellation plans.

Cancellation for the first quarter was slightly higher than a year ago, according to media analysts.

Meanwhile, despite what Nesvig says, pricing for fourth quarter scatter is slipping. Some networks are selling at between 5% and 30% below upfront pricing. That news isn’t as negative as it sounds, however, as many networks sold a larger than normal amount of prime time inventory during the upfront and don’t have much inventory left to sell.

The Super Bowl is the biggest TV program for the first quarter, and has not yet been affected by the economic crisis. Come January, that could change, as advertisers can still make adjustments to their Super Bowl buys.

Estimates say NBC has only eight to 10 spots left in the game, which the network is reportedly selling at $3 million per :30 spot.

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