Upfront May Pump Up Volume

Overall Commitments Rise 15% Over Last Year To a Record-Setting Total of $9.4B

By Jon Lafayette -- Multichannel News, 6/20/2011 12:01:00 AM

Chicago — After a strong broadcast upfront, the cable market is booming, particularly when it comes to volume.

Market sources estimate that the cable portion of the ad-sales upfron auction will be at least 15% higher than last year, bringing the total volume of advertising commitments to $9.4 billion, a record that would also eclipse the size of the broadcast total for the first time. Some large cable groups had volume increases in the range of 20% to 25%.

Prices increases vary from network to network, but ranged from high single-digit gains on a cost-per-thousand viewers (CPM) basis, or just below the lowest broadcast hikes, to increases in the high teens, on par with the best the broadcasters could manage.

Cable sales executives said the amount of money they were getting from agencies increased as the week went on, strengthening the market as it went along. They said they thought some of the added money might have come from broadcast, where the networks were aggressive about getting price increases in the doubledigit range. Th ere was also money shifting among the cable groups as some insisted on robust increases in their rates.

The big groups also attempted to move advertisers from their biggest networks to ones that are still emerging. It is easier for buyers to swallow big increases on smaller networks because their CPMs are usually still lower than the bigger channels, lowering their average cost per viewer.

Turner Broadcasting moved early, doing deals with most of the major agencies at 12% to 13%. In addition to getting increases, Turner managed to raise prices for its reality channel truTV to levels similar to those for its more established TNT and TBS, sources said.

Similarly, NBCUniversal’s cable group, which now includes networks that were part of Comcast before Comcast acquired a 51% interest in NBCU in January, was diverting money advertisers with low base rates were looking to spend on USA Network, buyers said. NBCU often was able to steer that money to other channels in its portfolio. That would help USA raise its average CPM while helping the entire group meet its revenue goals.

Discovery Networks was looking to funnel the high volume it was seeing into Investigation Discovery, which has seen a huge increase in viewership since the last upfront. Sponsors were also being encouraged to put money into Science, Military Channel and the new Velocity.

The high volume may also help A&E Networks, which has a big win in History and a turnaround situation in Lifetime that are balancing each other out.

Buyers said that some MTV Networks channels — such as VH1 and Spike — were getting rates on the low end of the range, while its Comedy Central was achieving doubledigit gains. MTV’s rates were hampered because spending by clients looking to reach younger viewers did not appear to be rising as fast as other categories.