TV executives await blockbuster ad sales

Tue Mar 8, 2011 1:27pm EST
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By Paul Thomasch

NEW YORK (Reuters) - U.S. television executives are banking on a white-hot season for advertising sales, saying strong demand from automakers and telecommunications companies could drive prices up at least 10 percent.

Sales for the 2011-12 television season will not begin in earnest until May, leaving plenty of time for worries about unemployment, the housing market and high oil prices to chase away advertisers.

But that did not keep top TV executives this week from talking up prospects for May's upfront sales, so called because they occur each year after the broadcast networks unveil their new schedules, but ahead of the actual TV season. At stake is $8 billion to $9 billion in commercial time.

"We have to get substantial price increases. I am sure we will," CBS Corp Chief Executive Les Moonves said at a Deutsche Bank conference. "I'm going to get criticized tomorrow. The advertiser is going to say: 'He's an idiot; they are never going to get that.' But I would be very surprised if we took much inventory below double digits."

At CBS, home to hits such as "CSI: Crime Scene Investigation," advertisers have paid up heavily to purchase last-minute commercial spots, known as the scatter market in the TV industry. In some cases, rates are up 35 percent to 40 percent over those paid during the 2010 upfront, said Moonves.

A healthier auto market is among the reasons TV executives sound so confident because Ford Motor Co., General Motors Co and Chrysler are some of Madison Avenue's top spenders. But other categories are also hot, including telecommunications, consumer electronics and banking.

Speaking at the conference on Tuesday, Discovery Communications Inc Chief Financial Officer Brad Singer said the cable company had experienced "a fairly uniform strength across all categories" in recent weeks.

Cable upfront sales start just ahead of those by broadcast networks CBS, Walt Disney Co's ABC, News Corp's Fox and NBC, controlled by Comcast Corp.   Continued...

<p>CBS chief executive officer Les Moonves arrives at the premiere of CBS Film's "Extraordinary Measures" at Grauman's Chinese Theatre in Hollywood, California, January 19, 2010. REUTERS/Danny Moloshok</p>