ABC upfront nets $2.4 bil

CPM bump best in biz once again

ABC has completed its upfront negotiations with more than $2.4 billion in primetime commitments, up 5% from last year and with an industry-leading cost per thousand increase between 8% and 10%.

ABC joined Fox in finishing negotiations to a historic upfront that marked the shift from program ratings to the use of average commercial minute ratings. The broadcast networks are likely to see a combined total of an estimated $9.2 billion committed by advertisers during the upfront, which would mark a gain of about 5% from the nearly $9.1 billion they received last year.

CBS on Wednesday had nearly completed upfront negotiations, with CPM increases reported in the high single digits and a 5% increase in volume to between $2.4 billion and $2.5 billion for primetime.

Fox completed its upfront deals this week for a record $1.9 billion in primetime, with average CPM increases of 7%-9%.

NBC was on track to finish its primetime upfront with $1.8 billion-$1.9 billion in commitments, with CPM increases of 5%-6%, sources said. The CW was the only one of the broadcast networks that had not substantially concluded its negotiations. The CW took in about $600 million in the upfront last year when it replaced the WB and UPN.

It clearly has been a stronger-than-expected upfront season for the broadcast networks that had weathered a 5%-10% decline in overall viewership to rake in strong gains, compared with last year's market, which favored advertisers and buyers. Scatter market pricing and the ability to gain large audiences helped move advertisers into the upfront marketplace instead of waiting until later, according to market sources.

Most of the deals were done under the new currency, average commercial minute live plus three-day ratings, that take into account the aggregate of all the commercial minutes in a half-hour or hour as well as the accumulated viewing from live and DVR playback. Some networks reported no deals based on program ratings, the metric that had been used for decades.

For ABC, it was the second straight year that the network had reached the highest CPM increases of any network. It also was further evidence of Madison Avenue's approval of the turnaround effected at the network by ABC Entertainment president Steve McPherson.

ABC ad sales chief Mike Shaw said Wednesday that the network's success in the upfront resulted from the strength of its product, with a high number of returning shows as well as new shows with buzz.

"The investment spending that the network made against the new programs for next year was very enthusiastically welcomed (by Madison Avenue)," Shaw said. "That demand drove our business."

He said the dramas, in particular, helped drive the ad dollars ABC's way, not only on TV but also in iTunes and with its broadband player. ABC made some broadband deals during the upfront this year, and there was substantially more deals this year as the network was more confident in pricing and strategy compared with last year, when it was still in test mode.

"It's substantially above last year what we've sold at this point," Shaw said.

ABC, which sold between 77% and 82% of its inventory this upfront, also had a good story to tell in other dayparts as well. The network increased revenue in every daypart this year, with double-digit increases in CPMs in early morning, evening news and daytime as well as increases to show in late fringe, with "Nightline" and "Jimmy Kimmel Live."

"Across the board we had a good story to tell," Shaw said.

Shaw said that success with average commercial minute ratings would depend on commercial retention but noted, "We're in great shape to continue to reap the benefits of the new metric."
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