Why Opposite Directions?

In Network TV, Supply and Demand Going in Opposite Directions.

If the Big Four networks are indeed able to command significant price increases in the upfront market, it will again be remarkable just how vast the spread is between supply and demand. CPMs and ratings continue to head in strikingly opposite directions.

To wit: Barclays Capital projects ABC to command 10% price bumps, while the network’s C3 ratings in the 18-to-49 demo this season are down … 10%.

At Fox, Barclays projects CPMs to go up 10%, while its ratings are down 6%.

At CBS, pricing would go up 12%, while ratings have declined 7%. NBC would have an 8% increase in CPMs as its ratings have dropped 6%.

Jeff Immelt may be happy he doesn’t have to answer many questions about NBC anymore, but is there another part of GE that has such a curious relationship with the demand curve? Post-recession, the business of network TV seems strong enough to have some at GE with at least some seller’s remorse. Partly, because next time there is a recession, the impact should be softened because of the carriage fees the networks are now benefiting from.

Still, GE frustration with how much harder it is to produce hit programming than a superlative jet engine seems legit. Networks are finishing off an unimpressive year there. Read the whole story http://bit.ly/ipgbmD

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About Ivan Cevallos

Blogger, entrepreneur, strategist, and digital producer. View all posts by Ivan Cevallos

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