CBS historically has reached older viewers with such shows as "60 Minutes" and "Touched by an Angel." Though advertisers typically pay less to reach older viewers, the network is in the sweet spot for some pharmaceutical companies offering Viagra or arthritis drugs. CBS, however, has been making progress in getting younger viewers with shows such as "Survivor" and "Everybody Loves Raymond."
a Year in Advance
The creative process for the upfronts began in July, when talent agencies and studios started assembling show ideas, writers, actors, producers and directors for the fall 2002 season. By Christmas, the networks had bought more than 500 scripts and then winnowed those down to 115 TV pilots that were ordered in January. Production of these pilots began in March and April, and only about 35 will make the final fall schedules.
During the last two weeks, network presidents, their bosses and their staffs have been holed up in screening rooms around Los Angeles and New York, grading each show to plug holes in their schedules. Producers and actors won't know if their shows make the cut until a day or two before a network presents its fall lineup this week.
In New York, NBC presents its fall schedule first, today at Radio City Music Hall. NBC, owned by General Electric Co., is expected to put on relatively few new shows because of its solid lineup, which includes "The West Wing" and "Will & Grace." But the network is looking to find a replacement on Thursdays for its top-rated sitcom, "Friends," which is headed into its final year.
"[NBC's] best shows are getting long in the tooth, and they need a next generation of hits," said Tim Spengler, a top ad buyer at Initiative Media North America, which spends $2 billion for clients such as Maybelline and Home Depot Inc.
ABC will unveil its fall schedule on Tuesday at the New Amsterdam Theatre. The theater, which holds 1,800, is hardly big enough for the droves of ad buyers, talent agents, network and studio executives and reporters who will stampede the venue. ABC, owned by Walt Disney Co., is in the worst shape among the major networks after losing 24% of its prime-time audience this season. ABC needs a big lineup change, with new shows every night.
CBS, owned by Viacom Inc., rolls out its schedule Wednesday at Carnegie Hall. CBS Chief Executive Leslie Moonves, a former actor, loves the drama and theater of the upfront presentations and is the most insistent about keeping the lineup a secret. Moonves orders staff members who deal with the media to leave their cell phones and pagers in a hotel room so they won't be tempted to slip details of CBS' new plan. A velvet curtain covers CBS' list of the new fall schedule until Moonves regally lifts it at a news conference before the formal presentation.
Fox network, owned by News Corp., presents its offerings on Thursday. Fox is coming off a disappointing season and has plenty of gaps to fill with "The X-Files" and "Ally McBeal" finishing their run this spring.
Every network has some weakness. But the established networks--CBS, ABC, NBC and Fox--charge the highest rates because they bring in the biggest TV audiences. Last year, NBC was the big winner at the upfronts, selling $2 billion of commercials, followed by ABC with $1.7 billion, CBS with $1.4 billion, and Fox with $1.3 billion, according to the Jack Myers Report, an industry newsletter.
NBC and CBS are expected to fare better this year than ABC and Fox because of their stronger ratings.
One unknown is whether the networks can maintain the rates they charge, given an overall advertising slowdown, competition from cable and the consolidation of major ad agencies. In the last decade, scores of agencies have been bought up by four international conglomerates.
"We are so large that we have a good idea of what the market is, because we are the market," said ad buyer Spengler.
"The only thing worse than paying too much is not getting on a [popular] show," said Joe Abruzzese, CBS' president of network advertising sales. "There's nothing worse than going back to a client and saying, 'I couldn't spend your money or get you on "Everybody Loves Raymond" or "Survivor."'"
Major Networks Must Compete With Cable
Back in the 1980s ABC, NBC and CBS had all the negotiating power with ad agencies because of their dominance over prime-time. Today, upstart networks such as UPN and WB provide alternatives, as do cable channels that charge lower rates and have more defined audiences.
Indeed, a year ago cable channels grabbed $4 billion, or 37% of the total upfront ad market, compared with only 19% a decade ago. But cable networks sell only half their commercial time well in advance, giving advertisers more flexibility to wait and buy ads on the open market.
But Jamie Kellner, president of AOL Time Warner Inc.'s Turner Broadcasting System, which oversees WB and cable channels including TBS, CNN and Cartoon Network, acknowledges that "cable still gets the [advertising] leftovers."