The 2011-2012 broadcast TV upfront revenue is predicted to be up in that range, with cable faring even better with dollar volume up about 15% YOY. With the scatter market pacing some 25-40% above last year’s upfront levels, double-digit CPM increases are more achievable this year than last. Estimates for the Big Four broadcast nets has CBS locking in pricing increases of +12% YOY, ABC +10%, FOX +10% and NBC +8%, according to a Barclays Capital report.
“As the annual TV upfront ad-selling process gets under way, the tone of the U.S. TV ad market remains rather upbeat. We are optimistic about a strong national TV upfront, but have noticed more balanced trends in local and more traditional advertising media,” said the report. “Slightly higher sell-out levels offset by fewer ratings points. Given the tight scatter market, ad buyers may be willing to pay a premium to secure ad inventory in the upfront. And with ratings declines at the broadcast networks, incremental gross ratings points in cable could help cable achieve parity with broadcast in total dollar volume for the first time ever.”
The report also said the NFL lockout could tighten the market. Given the uncertainty surrounding the upcoming NFL season, demand for upfront inventory could argue for higher pricing and greater volume for broadcast and cable prime-time programming, as ad buyers will look to lock in broad audiences with ads on scripted and reality TV shows rather than sports/NFL games.
Barclays has also trimmed its overall U.S. ad estimates to +2.9% YOY (from +3.9%) in 2011 and to +5.2% YOY (from +6.0% YOY) in 2012, driven by lower outdoor, newspapers, direct mail, and directories estimates, partially offset by higher broadcast, cable, and internet estimates.