The bugle call marking the start of the TV advertising sales season began a little early this year.
On Sunday, CBS Corp. unleashed a marketing blitz to tell advertisers, viewers and Wall Street that CBS stands out because it draws more viewers than any other network. This morning, rival NBC plans to unveil its fall prime-time schedule -- two weeks before the traditional kickoff of the television "upfront" season and two weeks before the other networks announce their fall lineups.
These early-bird moves underscore the uneasiness in the television industry.
Network executives are preparing in the coming weeks to negotiate sales of their commercial time to advertisers for the coming year. Executives are worried because during last year's "upfront" market, the economy wasn't in such a bad state. But the last year has been filled with bad economic news, turmoil in the auto industry (a major television sponsor) and other companies cutting advertising spending.
One prominent analyst estimated that the major broadcast networks could be down as much as 15% to $7.4 billion for prime-time advertising sales for the fall season. During the crucial upfront market, which typically takes place in late May and June, networks sell as much as 80% of their prime-time commercial inventory for the coming season.
"While network sellers remain publicly adamant that they intend to hold the line on price, we expect to see year-over-year declines," Barclays Capital analyst Anthony J. DiClemente recently wrote.
CBS faces other challenges, prompting its promotional push. And CBS is different from its rivals because it has a good prime-time story to tell -- it is the only major broadcast network to increase its ratings compared with last season.
For years, CBS has been the steady eddie of broadcasters, generating solid ratings for its signature shows, including "CSI: Crime Scene Investigation," the comedy "Two and a Half Men" and the Navy forensic drama "NCIS," but little Hollywood sizzle.
Meanwhile, investors during the last nine months have punished CBS' stock. CBS shares, which closed Friday at $7.19, are down more than 50% during the last year. The company is more vulnerable in a recession than more diversified media companies because advertising makes up two-thirds of its overall revenue. CBS plans to report its financial results this week.
