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NBC Upfront Strategy: Hold Back Inventory For Scatter

With the first of the four major broadcast networks, NBC, slated to unveil its new series to advertisers this afternoon, it's time to take a look at how the network is going to strategize its way through what virtually everyone expects will be a down upfront sales market for it and its competitors. The answer? Hold as much inventory for the scatter market as you can get away with, and pray that the recent stock market uptick is the harbinger of an economic rebound.

NBC Universal's president of sales and marketing, Mike Pilot, said as much to Broadcasting & Cable's Claire Atkinson, (though without the praying part):

History would say that after a recession, the marketplace comes back pretty strongly and fairly quickly. That would suggest the right strategy for the upfront is that you understand the size of the market and make sure you look for proportionate share and hold enough good inventory to serve the demand in the scatter market, especially if you think the market is going to rebound.
Traditionally, the nets have held back about 25 percent of their inventory for scatter, which is sold much closer to airtime than the upfront market. Though virtually every number you read about the upfront is fungible, it will be fascinating to hear what the rumors are on how much the networks hold back. I expect to hear a lot of grumbling from advertisers and agencies that the networks are trying to create scarcity by holding back inventory.

What Pilot's statement leaves unaddressed is that, to date, the network TV ad sales market has somehow been immune from declines in prices as its viewership erodes. Pilot said, earlier in the interview, that he expects the slow shift of dollars from broadcast to cable to continue, but there's no hint so far that this year will be a turning point, in which advertisers start to turn their back on the broadcast nets and never turn all the way back. Still, as other part of the media industry, such as newspapers, have shown, recessions sometimes up-end what had been the usual state of affairs in permanent ways.

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