| Though scatter pricing remains modestly up, last year's
exuberance of "across the board" double-digit CPM and total
dollar increases for all networks would be missing for 2004/05 upfront,
predicts Merrill Lynch. Merrill Lynch estimates 0%-3% CPM gains at
ABC; 8%-9% CPM growth at NBC and FOX; and 10%-11% CPM growth at CBS.
Though these projected CPM increases are for primetime, the good news
is that the ad buyers have also started taking care of "value
day-parts," such as early morning and daytime, now.
Merrill Lynch anticipates a bifurcated broadcast network upfront
performance led by CBS (up 12% to $2.45bn total dollars; MLe) with
the largest CPM gains and the most consistent schedule. NBC (up
2% to $2.95bn; MLe) is expected to hold its own with the onus is
now on The Apprentice, which replaced Friends. FOX (up 3% to $1.55bn;
MLe) is somewhat of a wildcard given its bold strategy of year round
programming, and ABC (down 3% to $1.45bn; MLe) is aiming to stabilize
from a clear down trend.
In terms of total upfront dollars across all TV formats and day
parts, Merrill Lynch estimates a 10% increase, approaching $23 billion,
led by a $500mn share shift from broadcast to the cable networks.
Merrill Lynch believes that total dollars for the cable upfront
will reach $6.6 billion, up 20% (increase of $1.1 billion) on a
combination of 8% secular ratings growth (A18-49, excluding news),
varying CPM gains across networks, and relatively consistent inventory
sellout across the bulk of key cable networks (historically 40%-60%).
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