By
Anders Bylund
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June 14, 2011
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Surprise! The Internet hasn't killed TV advertising yet. In fact, the patient is doing all right -- and getting better.
The "upfront" season for TV networks to sign primetime ad contracts has just wrapped. All four majors snagged healthy improvements over last year's haul:
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Network
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2010 Commitments
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2011 Commitments
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Change
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ABC
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$2.2 billion
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$2.4 billion
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9%
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CBS (NYSE: CBS )
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$2.5 billion
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$2.7 billion
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8%
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Fox
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$1.9 billion
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$2.0 billion
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5%
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NBC
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$1.6 billion
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$1.7 billion
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6%
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Total
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$8.2 billion
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$8.8 billion
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7%
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Estimates by AdAge.
These are actually somewhat lowball numbers: NBC doesn't include most of its Super Bowl inventory in the upfront negotiations, nor are the 2012 London Olympics included. New Peacock owner Comcast (Nasdaq: CMCSA ) should be pretty happy with the 2011 season when all is said and done.
But the improvements run across the board, from ratings leader CBS to Walt Disney (NYSE: DIS ) division ABC and its ESPN properties. News Corp (NYSE: NWS ) subsidiary Fox Networks reportedly held back on price increases, despite the clout imparted by American Idol and the upcoming X-Factor -- one proven and one potential ratings monster. That's a stark contrast to NBC's attempt to raise prices by 18%, though it's had to settle for about 15% higher price tags per spot. Then again, Fox already commands strong prices; commonly considered a "mini-major" in the industry, Fox typically broadcasts about two hours of primetime programming every night, versus six for the other three.
This uptick reverses a long-running trend of lower and lower upfront sales. Advertisers have been shifting their ad budgets to a heavier mix of online and mobile marketing, where Google (Nasdaq: GOOG ) and Apple (Nasdaq: AAPL ) reign supreme.
Also, they've been leery of paying high prices for ad spots that are easily skipped if you use a TiVo (Nasdaq: TIVO ) or similar DVR device. Skipped ads just aren't as effective as the ones you actually watch. With a few years of widespread DVR activity under their belts, perhaps it's time for a collective sigh of relief -- ads aren't worthless in this environment after all!
Where will the entertainment industry go from here? Read up on this multifaceted sector, then add a few key operators to your watchlist:
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