Iger Hints Upfront May Disappear
Calls Advertiser Showcase An ‘Anachronism’
By Mike Farrell -- Multichannel News, 2/5/2008 5:47:00 PM
Just one day after News Corp. chief operating officer Peter Chernin vowed he would maintain the upfront for his networks, Walt Disney CEO Robert Iger hinted that the annual showcase for advertisers may be on the outs.
On a conference call with analysts to discuss Disney’s fiscal first-quarter results, Iger said that the ultimate fate of the upfront is up to the individual networks. But he hinted that the pageantry usually associated with the events could be a bit outdated.
Asked if the writers strike would affect the scheduling of the upfronts, Iger said that he expected Disney to be an aggressive participant in the sales process in the spring.
“How we present the schedule, and what schedule is presented is still open for discussion,” Iger said. “Personally, I think the manner that the schedule is presented, with the bells and whistles on a big stage and a fair amount of hors d’oeuvres feels like a bit of an anachronism to me. But those decisions will be ultimately made by the network and what they feel is right in terms of the best approach to marketing their schedule to advertisers and to the press.”
That’s a departure from Chernin’s remarks during News Corp.’s fiscal second-quarter conference call Tuesday, where the COO defended the upfront process as a valuable platform for both advertisers and networks.
But at the NATPE conference last week, NBC Universal CEO Jeff Zucker suggested NBCU might opt for meetings at agencies rather than upfront presentations, and said the NBC broadcast network could learn from USA Network and develop shows more selectively, rather than the costly, hit-and-miss pilot production process.
Iger’s comments came on the heels of another strong quarter for Disney. For the period ended Dec. 29, revenue rose 9% to $10.5 billion and operating income was up 15% to $2.2 billion, fueled by gains at its cable networks.
Cable network revenue increased 13% in the quarter to $2.4 billion, as operating income rose 27% to $586 million, due mainly to increases at ABC Family (higher affiliate and advertising revenue and lower programming costs without Major League Baseball) and its domestic Disney Channel. Disney Channel’s growth was primarily due to strong DVD sales of its High School Musical 2, which last August became the most-viewed show in cable history, and higher affiliate revenue through contractual rate increases and subscriber growth.
At ESPN, the addition of NASCAR programming led to advertising and affiliate revenue gains during the quarter, offset by higher programming and production costs.
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