Broadcast TV: Higher Rates, Fewer Dollars

The WSJ predicts that advertisers are likely to spend more money at the broadcast TV network “upfronts” this spring — the marathon sales pitch/ad auction for the coming year. But while this sounds like good news for the networks, it’s not.

Why? Because the upfronts are only part of advertisers’ overall spend — and they’re likely to buy more this spring because TV ratings are declining. And in broadcast TV’s weird economics, declining ratings = fewer eyeballs to deliver to advertisers = increasing rates for the inventory the networks do have. By buying early, advertisers are just trying to lock in rates for the coming year, and avoid getting screwed by increasing “scatter” prices later on.

The big picture: Viewers are continuing to abandon network TV for cable, the Web, and anything else they can find to amuse themselves. February ratings are down more than 15% from the year before. Season-to-date ratings are down 13%, a trend that began long before the writers strike had any effect. And ad dollars are going to follow them.

Earlier: Broadcast TV’s Woes = Upside For Cable

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