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Report: ABC scores on ad rates
Resurgent television network poised to be first to finish early sales for fall, sees rates increase.
May 27, 2005: 8:06 AM EDT

NEW YORK (CNN/Money) - ABC, the Walt Disney-owned network that pulled itself out of a ratings slump this year, has lined up initial ad sales at higher rates than last year, according to a new report., an advertising industry trade, reported Thursday that ABC is on track to be the first broadcast television network to complete sales for the coming fall television season.

The advance selling season, known as the television "upfront," kicked off last week as the six broadcast networks paraded their fall lineups before advertisers. In the upfront, networks strike deals with advertisers at set rates, selling as much as 80 percent of available commercial time. The remainder is held over for sale closer to airtime, when rates fluctuate.

The primetime upfront is valued at more than $9 billion. Including cable, syndication and other non-evening programming, roughly $23 billion worth of advertising deals are struck during the television upfront.

Overshadowing this year's upfront are signs that advertisers are shifting more dollars away from television advertising and to newer mediums like the Internet, now the fastest-growing segment of the advertising industry.

The network television industry has been roiled in recent years by the growth of alternative forms of entertainment, including cable television, video games and the Internet, as well as the growing popularity of ad-skipping digital video recorders.

For these reasons, many media industry analysts are predicting a lackluster upfront for the television networks. Merrill Lynch forecasts this year's primetime upfront will be flat or slightly up versus last year, at about $9.1 billion.

That's better than last year's 2 percent decline, according to Merrill Lynch, but well below the torrid 14 percent increase two years ago.

ABC's deals, as reported Thursday, appear to be in line with analyst estimates.

According to, ABC has negotiated deals with unnamed advertisers with rate increases of 4 and 6 percent. As encouraging as that sounds given the grim upfront predictions, media analysts have viewed ABC as one network with the most to gain in this year's upfront.

A year ago ABC was caught in a deep ratings slump. But "Desperate Housewives," "Lost," and a few more primetime hits have turned the Disney (Research) network from also-ran into rising star.

Ranked No. 4 last year, ABC finished the 2004-'05 season that officially ended Wednesday in second place among total viewers and third among young adults, according to Nielsen Media Research.

Incoming Disney CEO Robert Iger has predicted that ABC will turn a profit in 2005 after years of losses.

While it's unclear what impact ABC's upfront deals will have on the overall market, news that ABC is nearly done with its advance sales signals that the industry is about to find out whether analyst concerns are justified.

The way the upfront works, the early deals touch off a race among advertisers and networks to reach agreements. The upfront can last anywhere from a few days to several weeks as a result.

One anonymous media buyer told "We're preparing to go on to the other broadcast networks now and cable and syndication. We're ready to move if the pricing is advantageous."

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