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The Upfront’s Unknowns

Jun 24, 2007  •  Post A Comment

Based on the information available so far in the upfront advertising market, it appears that ad dollars are not leaving broadcast, said Sanford C. Bernstein analyst Michael Nathanson.
That said, the connection between the upfront and how much a network gets in advertising revenue is tenuous, he added.
“The upfront is the single biggest waste of journalists’ and analysts’ time,” Mr. Nathanson said. “Nothing about the upfront ever shows up in the broadcast company’s official earnings statements and most information is passed along by shadowy sources. Most importantly, there’s no freakin’ correlation between what happens in the upfront and what happens the rest of the year,” he said.
Mr. Nathanson noted sales aren’t really recorded during the upfront, just reservations that can be changed later in the broadcast season. To a large degree, the market is rigged for the sellers because buyers have to register their spending plans, which tell the networks how much clients want to spend.
“It’s like going to a casino and knowing what everyone’s cards are going to be,” Mr. Nathanson said. “It’s always going to be inflationary, and it gets more inflationary when inventory is in decline.”

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