NBC has a lot of making up to do, and is finally in a position to do it.
After a decade of languishing in third or fourth place, the network will finish the 2013-14 season as the top-rated network in the 18-49 demographic most important to advertisers.
That means it is finally dealing from a position of strength as it goes into this week’s upfront presentations to advertisers, in which the major networks pitch ad buyers on their upcoming season. Upfront sales take up most of the networks’ ad inventory. NBC goes first with its presentation Monday morning.
CBS, which is enjoying its sixth consecutive year as the most-watched network overall, always enters upfronts with swagger. But it had a little more last year, when it also ruled the 18-49 demo.
CBS was confident enough last year that CEO Les Moonves included a dig at NBC in his opening remarks. He said CBS believes drama belongs in primetime — “not at 7 in the morning or 11:30 at night.” As he spoke, an image of NBC’s Matt Lauer and a sobbing Ann Curry appeared behind him, followed by a shot of Jay Leno and incoming “Tonight Show” host Jimmy Fallon.
But things have worked out for NBC. Even the Fallon transition went more smoothly than anyone expected.
NBCUniversal CEO Steve Burke said at the start of the season, in September, that NBC was $500 million to $1 billion behind rivals ABC, CBS and Fox, in part because it charges advertisers 20 percent less than CBS and Fox due to its long run of low ratings.
Last season, NBC tied ABC for third. And that was a step up.
This year’s turnaround — aided by the Olympics and hits like “The Voice” and “The Blacklist” — has put NBC in a position to finally close in on its rivals. It benefited from its new owner, Comcast, investing heavily in programming.
When TheWrap asked NBC ad sales president Linda Yaccarino how many years NBC would need to close the advertising gap, she jokingly asked: Why assume it will take years?
“Going from last place to first place, obviously we’re in a great position,” she added. “We are in this for the long haul. Do we think it’s an overnight fix? No.”
CBS makes the case that it will be in an even stronger position next season that it was this year because it is adding Thursday night NFL games to its schedule. NBC’s “Sunday Night Football” is television’s top show, and a huge contributor to NBC’s success.
Last year, NBC booked roughly $2.1 billion in advertising sales, up from $1.8 billion in 2012, a person close to the negotiations told TheWrap. CBS held steady at $2.7 billion in upfront sales. Fox, which dipped in the ratings last season, slipped slightly from its 2012 take of $1.9 billion.
ABC was down slightly from 2012’s haul of $2.5 billion, according to AdWeek.
Brad Adgate, director of research for Horizon Media, told TheWrap that CBS is still strong this year — “even though they’re down a bit.” He noted that NBC’s success this season was attributable partly to the Olympics, which won’t air next season.
“They’re still pretty strong without sports,” he added.
Both NBC and CBS are confident enough to try to change the way they sell ads. Both networks are pushing this year for C+7 deals, an ambitious departure from the C+3 deals that now rule TV advertising.
In C+3 spending, advertisers pay rates based on the ratings a show’s commercials receive in the three days after it airs. With C+7, they would pay based on a seven-day rate.
The change is a concession to the fact that more people are watching shows on delay, days after they air. Networks have argued for years that advertisers need a better way of measuring viewership on delay or online. But Yacarrino said more C+7 deals would be a “nice step in the right direction.”
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The CW especially contends that its younger audience prefers to watch online, though every network has made the case that it deserves greater credit for online viewership and for DVR tune-in.
A few years ago, it might have seemed unimaginable that NBC would go into TV’s biggest week for advertising on top. The turnaround is a testament to the unpredictability of the industry.
There’s only one safe prediction, and Moonves made it in a conference call Thursday:
“There’s going to be winners and losers,” he said. “There are every year.”