In an unusual move, CBS this week plans to brief the press about its approach to the upcoming upfront advertising market.
CBS executives declined to discuss the agenda for the briefing, which is scheduled for April 13. But it is likely the network wants to position itself as the leading broadcast network and ward off a rumored ploy by advertisers to shift an even more substantial portion of their TV budgets to cable.
“My assumption is they’re going to talk about their strengths and their success and that network television is the place to be,” said Bill Cella, chairman of Magna Global, a big media buyer.
For the past decade NBC has been the leading broadcast network. With its dominance in delivery of the upscale 18- to 49-year-old viewers advertisers crave, the Peacock Network has held its upfront schedule announcement first, opened for business with media buyers first and set the price level for the market.
NBC has not been overly aggressive in raising prices, one rival network ad sales executive said. In past years NBC has used the strength of its prime time, particularly Thursday nights, to push advertisers to buy commercials in daytime, late-night, early morning programming and on its other television properties, which include Pax, MSNBC, CNBC and Telemundo.
CBS, by contrast, sought-and received-larger price increases in terms of costs per thousand viewers during last year’s upfront as its ratings and demos improved.
This year CBS again leads in household ratings. Its Nielsen numbers are up 3.6 percent over last season to a 8.6 season-to-date, while NBC is down 7.7 percent to a 7.8. In the 18 to 49 demo, CBS is the only network showing an increase. CBS is up 2.6 percent to a 4.0 demo rating, tying Fox and trailing NBC, which was down 6.7 percent to a 4.2 demo rating.
NBC executives declined to be interviewed about the upcoming upfront. During General Electric’s earnings conference call last week, GE Chief Financial Officer Keith Sherin described the scatter market at NBC as “up a little bit” and said the company was “expecting the next upfront to be good.”
Nevertheless, insiders question whether NBC will be able to continue to act as a market leader.
“If you’d have asked two months ago, I’d have said no way,” because of the network’s inability to come up with a sitcom to replace the departing “Friends” and “Frasier,” said one rival network ad sales executive. “But ‘The Apprentice’ has helped them quite a bit.”
Can CBS take the reins from NBC?
“I guess they can,” Mr. Cella said. “They’ve had very good success building their brand and their audience. NBC had been challenged this year. Maybe CBS will take this tack if they want to lead the market, but there still is a strong delivery of 18 to 49 at NBC, and they’ve got that urban skew and upscale skew and that’s something a lot of advertisers are looking for too.”
In a recent interview, Mel Karmazin, president and chief operating officer at Viacom, parent of CBS, called the notion that advertisers would shift spending from broadcast “garbage.” He said, “More and more money continues to come to network television and will continue to come to network television” and that “the prices charged are not too high.”
Opening Salvo
Next week’s press conference may be an opening salvo in a push for higher prices. “I think CBS is going to be very aggressive this year,” said the rival network sales executive. “Now they feel like their ratings are on par with NBC. They have a real quality schedule. But they are still priced much less than NBC, and even ABC, and people should pay more for them.”
But Mr. Cella thinks the networks are going to have to be more reasonable this year.
“Nobody wants aggressive pricing stances. I don’t see how there can be, because the scatter market has been mediocre at best the last three quarters,” he said. “Clients are very unhappy with the high prices of network television. Oh, they’ll move money, without question. I don’t want to bolster cable, but there are definitely clients that are looking to shift money.”
Of course, with Viacom such a big player in the cable business, it makes money either way, Mr. Cella said.
The key for the broadcasters was to try to maintain the same volume of spending they saw from advertisers last year, he said. “Some network won’t get to the number they reached last year.”
Jay Sherman contributed to this report.