ABC expects 2 billion in ad revenue

NEW YORK (Reuters) - The ABC television network on Tuesday said it expects early advertising revenue commitments for the 2005-2006 broadcast season to rise more than 30 percent from a year ago on the strength of a ratings comeback.

The network, owned by Walt Disney Co., expected to book close to $2.1 billion for commercial time on prime-time entertainment, up from $1.6 billion a year ago, and about $600 million for sports, excluding its 2006 Super Bowl broadcast.

ABC has nearly completed early sales for its prime-time lineup next season, making it the first television network to wrap up deals after one week of negotiations with advertisers.

The network moved to the No. 3 spot for young adult viewers from last place among the four major U.S. television networks after a three-year slump, largely due to the success of new shows such as darkly comic soap opera "Desperate Housewives."

Media sources said prices for the "Desperate Housewives" finale next year were fetching as much as $1 million for a 30-second spot, putting the show in league with television's most expensive events. ABC officials would not comment on prices for individual shows.

ABC secured price increases of 4 percent to 6 percent in cost per thousand viewers, a standard measure of commercial time, the network said.

Anne Sweeney, president of the Disney-ABC Television Group, said the early indications bolstered ABC's aim of turning a profit in 2005 after several years of flagging ratings.

"The increases are coming across the entire network," Sweeney told Reuters. "It was amazing that the marketplace responded so quickly and positively."

ABC SETS TONE FOR MARKET

Mike Shaw, ABC president of sales and marketing, said some advertisers were especially keen on the first and final episodes of three returning hits: "Desperate Housewives," castaway thriller "Lost" and medical drama "Grey's Anatomy."

"We had great returning programs that we launched this year," Shaw said. "There was some demand in a couple of (advertising) categories for the premieres and finales of those three shows that caught some of us by surprise.

Media buyers said ABC's moderate price increases set the tone for the rest of the upfront market, with networks apparently aiming to secure higher prices for short-term "scatter" advertising buys throughout the year.

"In the last couple of years the upfront was a little overpriced and that resulted in soft scatter," said Steve Grubbs, chief executive at media buyer PHD North America, part of Omnicom . "They (networks) priced it this year in such a way that scatter will probably be sold at the traditional 10 percent to 15 percent premium versus upfront."

Viacom Inc's. CBS and rival News Corp. network Fox have written more than half of their advertising sales, with cost per thousand viewers rising 4 percent to 5 percent, buyers and network sources said. Fox was expected to come in flat to slightly higher than last year's $1.6 billion.

NBC, which fell to fourth place in the ratings after nearly a decade of dominance, has lagged in its negotiations in an apparent attempt to bolster its pricing. NBC is owned by General Electric Co. Media buyers said the top four networks should close upfront deals by early next week.

ABC also sold slightly more of its ad time during the upfront than a year ago, even as its rivals were expected to hold back some inventory to bolster price increases.