Networks’ Pre-Sold Ads Earn Record Revenues Despite Fewer Viewers

The television networks have reaped more revenue from pre-sold advertising time for next season than ever before, despite their mediocre prime-time results during the just-concluded broadcast year.

The networks are finishing the annual ritual known as the upfront market, when they sell advertising time in their new prime-time schedules. With the fledgling UPN and WB Networks included, total prime-time sales are expected to near $6 billion.

Aggregate sales estimates for the four major networks appear to exceed last year by 2% to 3%, which is noteworthy given their overall audience decline of more than 8% compared with year-ago levels.

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Industry executives attribute the revenue rise to a number of factors. Foremost, even with their strength reduced and the audience increasingly fragmented, the networks are regarded as the only way to immediately make an impression on a national audience in launching new products.

“There is nothing else that has that kind of reach,” said Paul Schulman, who heads his own media-buying agency in New York.

In addition, the network schedules in general, and CBS’ in particular, are deemed to be more competitive and thus less likely to experience the declines witnessed a year ago.

“It’s a strong case for broadcast [TV],” said Jon Nesvig, Fox president of sales. “In spite of [that] erosion, it’s still the best way to reach people.”

NBC, coming off its first prime-time ratings win since the 1990-91 campaign, reaped the benefits of its success. Network executives are saying NBC rang up an unprecedented $2 billion in prime-time advertising, with average rate increases of 10% or more.

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Auto makers, movie studios and telecommunications companies helped fuel the market this year, with studios paying a premium to advertise in NBC’s powerhouse Thursday lineup to promote new releases opening on the weekend. Still, NBC West Coast President Don Ohlmeyer stressed that the network’s gains were spread around, having doubled its upfront tally from three years ago, when NBC was in third place.

ABC has sold an estimated $1.6 billion worth of commercial time, while CBS--which tends to lag behind in the key younger demographic most sought by advertisers--totaled $1.2 billion. Fox Broadcasting (which programs 15 hours a week, compared with 22 hours for the other networks) came in at just over $950 million.

Fox will also televise the World Series and Super Bowl next season, which weren’t included in the upfront totals.

Each network sells between 80% and 85% of its available prime-time inventory, retaining the rest for what’s known as the scatter market--time that in success can be sold later at a premium.

If a network falls short of its ratings goals, that time can be used up on “make-goods,” free commercials given to advertisers to make up for ratings shortfalls in the spots already sold.