Network TV Upfront Cost Inflation Forecast 2013/2014

Our detailed forecast is belowThis year39s Upfront negotiations are likely to unfold as an almostcarbon copy of last year39s with costperthousand inflation running slightly below last year39s final results The annual Myers Upfront Inflation Forecast is published below reflecting the composite perspectives of buyers and sellers plus Myers39 proprietary economic analysis Over the past decade Myers39 forecasts have been recognized as the most accurate industry assessments of economic market realitiesUnlike last year39s Upfront discussions audience erosion is front and center While buyers reject conversion from C3 to C7 deals using the extended time delay are actively being discussed Firstquarter primetime Adult 1849 broadcast viewership trends were down 16 using LiveSame Day yearoveryear with C3 at 15 and C7 at 135 respectively including specials and the Super Bowl Total primetime C3 audience delivery is down 8 with Cable39s C3 A1849 primetime audience delivery declining by three percent The differential between same day and C7 is meaningful The impact of C3 viewing lifted primetime A1849 audiences by 19 for broadcast and 3 for cable vs live viewingAn even more relevant factor in this year39s Upfront negotiations will be the added value of online video viewing especially for broadcast and selected cable networks With Nielsen39s introduction of Online Campaign Ratings OCR integrated TV and online data is available for the first time and will factor into the networks39 success in capturing more than 50 of all digital video ad spending this calendar year Notwithstanding this success buyers will use digital options as leverage in their negotiations networks that integrate their legacy and digital video offerings will benefitEven with declining ratings and expanding digital options broadcast and cable networks39 costsperthousand will continue to increase Overall demand is expected to increase two to three percent over last year39s Upfront market Broadcast revenues are projected to decline 2 to 3 cable revenue volume is forecast to increase 7 to 9 syndication volume is projected to increase 2Advertising remains a reachfocused business and network TV remains the dominant vehicle for delivering reach unequaled by any emerging competitor amp8211 yet There are only a few premium programs amp8211 broadcast cable or digital amp8211 that command the highest costs and that are the catalyst for Upfront negotiations Marketers that opt out of the Upfront are relegated to the second tier of programs The Upfront is much like a concert or sports event if you want to sit in the best section and be assured the best seats you need to make an early commitment except in the Upfront you39re also loaded up with mezzanine and bleacher seats The alternative is to pay scalpers more at a later date for the less appealing seats without access to the best seats in the house As fewer and fewer seats are available prices continue to rise This year more money will be invested in digital but the costsperthousand for network TV inventory will continue to be on the riseThe forecasts below reflect projected averages which assumes some networks and syndicators will outperform the average and others will underperform Sellers of course are seeking increases at the high end of these averages and buyers are seeking to book business at the low endJACK MYERS MEDIA BUSINESS REPORTamp16020132014 Upfront Inflation Forecastamp1605132013amp160amp160amp160amp160amp160amp160amp160amp160amp160amp160amp160OVERALL UPFRONT SPENDING VOLUME GROWTHamp160amp16020 30Broadcast Revenue Volumeamp160amp16020 3amp160Broadcast Digital Video Revenue Volume400Cable Revenue Volumeamp160amp1607 9amp160Cable Digital Revenue Volume250Broadcast Syndication Revenue Volumeamp160200Online Originated Video Revenue Volumeamp160700amp160amp160amp160amp160amp160Annual 2013 vs 2012amp160amp160amp160amp160amp160amp160AVERAGE COSTPERTHOUSAND GROWTHamp160amp160DaypartNetworkamp160CPM Inflationamp160amp160amp160amp160amp160amp160amp160amp160amp160Broadcast Network Primetime55 75amp160amp160AM News 79 AMamp16030 40amp160amp160Daytimeamp160amp16060 80amp160amp160Evening Newsamp16020 40amp160amp160Latenightamp160amp16050 60amp160amp160Cable amp8211amp160amp160amp160amp160amp160amp160amp160Broad Based65 85amp160amp160amp160Large Niche70amp160amp160amp160Small Niche25 35amp160amp160amp160Lower Rated20 30amp160amp160Broadcast Syndicationamp160amp160amp160amp160High Demand50 80amp160amp160amp160MidDemand30 60amp160amp160amp160LowDemand00 30amp160amp160Hispanicamp160amp160amp160amp160amp160amp160Broadcast50 70amp160amp160amp160Cableamp16050 80amp160amp160amp160amp160amp160amp160amp160amp160Source Jack Myers Media Business Report Upfront Forecastamp160amp160amp169Contents copyright 2013 Media Advisory Corpamp160May not be redistributed except to corporate members of Myers Media Business NetworkSelected original programming and new offnetwork content such as Modern Familyon USA are expected to command higher CPM increasesamp160Selected networks with a low CPM base rate and ratings growth are expected to outperform market averagesamp160amp160amp160amp160amp160amp160amp160amp160amp160amp160amp160amp160If you are receiving this report you are a registered member to Jack Myers Media Business Network or are receiving it as part of a registered corporate membership As a member Jack responds personally to your emails requests and comments He is available to speak at your company events In addition to Jack Myers Media Business Reports your membership underwrites MediaBizBloggerscom Women in Media Mentoring Initiative Jack Myers Wall St Report Jack Myers Video Media Report plus our exclusive industry economic forecasts trend forecasts and corporate performance research Redistribution in any form except among approved individuals within your company is prohibited As a member you have full access to all archives and reports at wwwjackmyerscom If you require your ID 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Network TV Upfront Cost Inflation Forecast 2013/2014

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