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Upfront prime-time pricing increased significantly, but volume wobbled

This year's upfront marketplace saw media networks secure sizable prime-time pricing increases, but volume did not keep pace, according to Media Dynamics.

The advertising analysis and forecasting company estimates that cost-per-thousand, or CPM, pricing against adults 18 and older for the traditional prime-time upfront for the 2021-22 TV season rose 19.4% for broadcast networks to an average of $45.03, up from an average of $37.71 for the 2020-21 upfront. Of course, last year's upfront was significantly impacted by the pandemic, but CPMs were also up against the 2019-20 upfront, where network CPMs averaged $36.19, according to Media Dynamics.

On the national cable network front, Media Dynamics places the average CPM increase at 9.7% to $21.83 for the 2021-22 campaign, up from $19.90 in the prior season's negotiating period.

During the upfront, content providers sell linear and digital schedules to media agencies and their clients ahead of the upcoming TV season. In scatter, marketers secure commercial inventory closer to a program’s air date, often at prices significantly above those negotiated during the upfront.

Prices during the current cycle benefited from fewer available gross ratings points, as subscription video on demand services Netflix Inc., Amazon.com Inc.'s Prime Video and The Walt Disney Co.'s Disney+ grabbed market share from traditional linear, ad-supported offerings.

While prices were up strongly, it was more a mixed bag relative to volume. Broadcast networks notched a 6.9% year-over-year advance to $9.3 billion. Media Dynamics estimated upfront prime-time transactions ahead of the 2019-20 season were at $10.2 billion.

National cable network upfront volume receded 2% to $9.7 billion from $9.9 billion a year ago. During the 2019-20 upfront, cable networks secured deals totaling $11.7 billion.

All told, broadcast and cable networks registered combined volume of $19.04 billion, up 2.2% from $18.63 billion during a pandemic-protracted 2020-21 upfront market, when some deals could not be finalized until September. Historically, most upfront transactions are completed between late May into July. For the 2019-20 upfront selling season, Media Dynamics pegged broadcast and national cable’s networks prime-time upfront tally at $21.9 billion, well above this year's figure.

With media conglomerates Warner Media LLC, Discovery Inc., ViacomCBS Inc. and NBCUniversal Media LLC touting the ad-supported versions of their streaming services, there was a push toward getting buyers to shift some of their spending to HBO Max, Discovery+, Paramount+ and Peacock, respectively.

"While some sellers tried to press the buyers to allocate up to 30% of their upfront buys to the sellers' AVOD services or sponsor sales made on their websites ... much of this was already budgeted and not necessarily part of the planned 'linear TV' spending,” said Media Dynamics President Ed Papazian in a release.

Papazian also noted that with higher scatter pricing, networks held back some upfront inventory to capitalize on an improved ad market overall.