The biggest U.S. TV networks have already increased their advertising revenue for the season starting in Fall 2011 by 8.1%, with $8.7 billion in advertising commitments. CBS Corp. (NYSE:CBS), the owner of TV’s most-watched network, commanded a rate increase of 13-15%. NBC (NASDAQ:CMCSA) (NYSE:GE), Fox (NASDAQ:NWSA) and ABC (NYSE:DIS) all raised their prices from 9-11%. Michael Morris, an analyst with Davenport & Co, is saying the advertising market is the best it has been in years, saying the results could have been even better had it not been for recent news of rising unemployment and falling house prices that have scared investors.
CBS (NYSE:CBS) is said to have received $2.65 billion in primetime commitments for the upcoming season, the most of any network. ABC (NYSE:DIS) will get $2.4 billion and NBC (NASDAQ:CMCSA) will bring in $1.7 billion, an increase of about $100 million over last year. Fox, which only produces two hours of primetime programming a night while its competitors host 3 hours of programming, has received $1.95 billion in advertising commitments, roughly $200 million more than last year. Fox is the leader in the 18-49 age group, the most popular demographic for advertisers.
As long as the job and housing markets remain tenuous, advertisers remain weary about spending “too much”? So how did the networks squeeze out record numbers in upfronts during a recession? Well, for one, U.S. automakers are hoping to use advertising to help them regain their market share lost during the recession. And while it was initially thought pharmaceutical and consumer-packaged-good spending would be down, that was not the case. Other big spenders included retailers, movie studios, restaurants, and financial-services marketers.
CBS (NYSE:CBS) was able to see the largest gains of any network because of their consistent programming — the network hosts many popular returning shows such as “Two and a Half Men” and the CSI franchise — and their status as the most widely watched network. Fox’s (NASDAQ:NWSA) leadership of advertisers’ most desirable demographic was aided by hit shows like “Glee” and “American Idol”. And NBC’s new co-owners, Comcast Corp. (NASDAQ:CMCSA), have made a commitment to increase spending on programming that will hopefully pull NBC out of fourth place in viewership among the big four networks.