Hot TV season peppered with ad dollars

September 07, 1994|By Bill Carter | Bill Carter,New York Times News Service

The broadcast networks may or may not be changing hands, but their hands are certainly filling with change -- and every other form of currency -- as a new television season is set to begin.

One of the subplots to last week's churning rumors about the possible sale of one or more networks was the remarkable financial comeback of the network television business. Advance sales of commercial time for the prime-time season, known as the upfront market, reached a record high of $4.4 billion this summer.

And the sales heat has not yet cooled. The prices for commercials in fall shows sold on a one-shot basis, known as the scatter market, are only going up.

"We're selling in the scatter market at prices 35 percent above the upfront," says Joseph Abruzzese, senior vice president of sales for CBS.

Mr. Abruzzese says one advertiser approached the network last week about getting out of a $4 million commitment to buy commercials. "In the past few years we would have had a long, anguished discussion and tried to keep this guy's money," Mr. Abruzzese says. "This time we said fine. Then we turned around and resold the time to somebody else -- in half an hour."

Paul Schulman, president of his own media buying agency, says: "I haven't seen a network market like this in 15 years. It involves every day part: morning, daytime, late night, prime time. Everything is hot."

What is driving the demand for commercial time? Mr. Schulman cites several factors, including new products that are seeking the instant national attention that only network exposure can bring. (He mentioned, in particular, a new pain reliever, Alleve, which "has a huge budget behind it.") Auto makers are also spending heavily on television to introduce their new models, and computer companies are pushing new product lines with extensive network advertising.

"The No. 1 reason has to be the national economy," says Steve Sternberg, senior partner with BJK&E Media Group. After years when recession held back spending on television, "people have money to spend this year," he said.

Mr. Schulman and other forecasters say they expected the boom market to continue for at least another 12 months. The picture would be even brighter if the new season held promise for a strong crop of new hit shows. But most analysts have called the season anything from timid to safe, with few prospects for smash hits.

"No single show will break through," Mr. Schulman says, a sharp contrast with last season, which was one of the strongest in recent memory, producing new hits like ABC's "NYPD Blue," and "Grace Under Fire," NBC's "Frasier" and Fox's "X-Files."

Still, Mr. Schulman says, "it's all about supply and demand." And the demand is intense. The networks have aided themselves, he says, by being more realistic in their estimates of what kind of ratings their shows will receive. "We didn't see a lot of Hans Christian Andersen estimates this year," he says.

As long as the shows do not fall short of their estimated ratings, the networks will not have to offer free ads, known as make-goods, to makeup for not meeting the goal.

With business this strong, there will be a special benefit in being the network that performs best this fall. If a network is scoring better than its estimated rating, it can start to "sell the bank," as Mr. Schulman puts it, referring to the reserve of commercial time that a network sets aside at the beginning of a season in case it has serious shortfalls in performance.

Mr. Schulman predicts that all four networks stand a chance of doing extremely well financially this fall, but adds: "ABC is loaded for bear. They could have a huge year."

Gene DeWitt, who also heads a media buying agency, is more cautious about the spending boom this fall, saying, "This industry always gets overly bullish when things are going well and overly bearish when they're not." But, he concedes, "this is the firmest market I've seen in at least five or six years."

Mr. DeWitt says the market was being driven by companies responding to shareholders' demands that improvements in earnings be tied to more than just staff reductions. "These companies have to start putting something back into brand equity," Mr. DeWitt says. That means sales increases, he says, "and the best way to drive that is advertising."

Still, advertisers have never had more television options for their dollars. They can look to syndicators or scores of cable channels if they want to avoid paying the high rent on network row.

But a conviction is growing in the advertising industry that network television, after many lean, mean years spent crawling through the cable-ravaged desert struggling for survival, has come back to reasonably robust health.

"The erosion has essentially stopped," Mr. Schulman says. "Network television is a very solid business right now."

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