US-based ★ US TV: "Skipper Market" Gains Momentum to Offset Weak TV Upfronts

Ad Age reports that this year's "Upfronts"—where networks announce their fall programming lineups and pre-sell commercial slots for the new season starting in September—were the weakest since 2010, when the industry began recovering from the Lehman Shock. Compensating for this is the "scatter market," where unsold Upfront advertising slots are later sold in smaller portions, accounting for 20-25% of each network's advertising revenue. The growth in scatter market sales has network executives optimistic that they can eventually recover the decline in commercial revenue over the long term.

According to Standard Media Index, a research firm specializing in corporate advertising expenditure data, July's scatter market sales in the TV industry surged 54% month-over-month, driven by strong performance from FOX's broadcast of the Women's World Cup soccer tournament. CBS Corporation CEO Leslie Moonves told investors in early August that growth in the scatter market is driving a sharp improvement in performance for its CBS Television division in the third quarter. He further stated that CM prices are exceeding upfront rates by double-digit percentages and expressed confidence this trend will continue. According to Joe Ianniero, COO of the corporation, automotive and pharmaceutical companies are particularly active in the scatter market.

Walt Disney CFO Christine McCarthy told analysts in August that while ABC's scatter market sales were more modest than CBS', "CM prices are slightly above upfront levels."　Comcast, NBC's parent company, did not mention the scatter market in its latest earnings report. However, sources indicate NBC's sales are particularly strong, driven by two major draws within the group: "Sunday Night Football" and "The Voice."

Buyer research indicates that the shows likely to see concentrated scatter market buying this fall include NBC's "The Voice," FOX's "Empire," CBS's "The Big Bang Theory," ABC's Thursday night lineup, and NFL broadcasts – all established hits.

However, while the scatter market is supporting sales that were weak during the upfronts, it remains unpredictable how various external factors weighing on the TV industry will impact it long-term. For instance, live TV viewing is declining as younger audiences, particularly those aged 18-24, shift to non-traditional media, while video streaming services like Netflix are further undermining television. In August, media stocks lost over $70 billion in market value, partly due to cable TV cancellations.

However, David Zaslav, CEO of Discovery Communications, which set a new record for Scatter Market sales in the second quarter, stated, "It's too early to predict the fourth quarter, but the market is definitely looking up, and we're earning ratings. We can't say this will continue, but the current situation is satisfactory."

 

Source: Ad Age

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