BEVERLY HILLS (Reuters) – The heads of media giants CBS Corp and Viacom on Monday sounded positive notes on the upcoming, crucial season for advertising negotiations, saying signs pointed to strong demand and a recovery in long-depressed rates.
CBS CEO Leslie Moonves and Viacom executive chairman Sumner Redstone told Reuters they were confident of a rebound in rates during the imminent yearly "upfront" negotiations for commercials, when media discuss advance rates for advertising with customers.
"Upfronts are looking really positive," Moonves told reporters at the Milken Institute Global Conference.
Moonves also cited strong demand for commercials bought close to when they air, commonly referred to as the scatter market. "It's up in the high 20s (percent) right now," he said.
Industry experts believe advertisers this year could seek to avoid hefty premiums by buying more in advance, which will boost the upfront prices.
"The markets are booming and literally every one of our advertising businesses is up substantially," Moonves said.
Analysts say advertisers are returning and paying more, though they warn that longer-term, media giants are grappling with a gradual migration of advertising dollars to the Internet and other new forms of media.
Redstone also sounded a positive note. "I think advertising is coming back and the companies that depend on advertising are going to be big winners."
In 2009, advertisers bought about 15 percent less commercial time from networks ABC, NBC, CBS and Fox and, for the first time in years, paid less for that airtime. That followed months of what participants described as protracted and frustrating discussions, with cash-strapped corporations holding out for lower rates.
Many analysts point to a smoother round in 2010 alongside an economic recovery and loosening corporate budgets.
"When you look at where we were a year ago to where we are today, it's phenomenally different. And obviously the economy has helped," Moonves said.
"In a company like ours, which is 65 percent advertising, it's like a year ago, we apologized. We used to say we're 65 percent advertising, too bad. Now it's we're 65 percent advertising. How great is that."
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