Pivotal Research Group, a New York-based equity research firm, is projecting 8% in cost-per-thousand impressions (CPM) in network primetime. Analyst Brian Wieser expects this to be a boon for those broadcasters. RBR.com quoted Wieser as saying he expects “These seemingly favorable price increases to positively impact sentiment around ad-supported media stocks including CBS, Comcast, Walt Disney and News Corp.” Cable networks (including Time Warner, Discovery and AMC) will likely enjoy a “halo” effect.
In last year’s upfront market, broadcasters ABC, CBS, Fox and NBC saw CPM prices increase by 9% reported paidContent, while cable networks jumped 12%. So this is good, and perhaps unexpected news for the networks. If Internet video has reached a tipping point (with announcements like original content from Netflix and Hulu), it “doesn’t appear to be coming at the expense of traditional TV,” suggests paidContent.
While that 8% is a very educated guess, it is an imprecise one; advertisers may surprise the networks at the negotiating table—chiefly by not showing up, or by putting their ad dollars online. In a worst-case scenario Wieser believes that the rise could be as low as 5%.
