Analyst: Upfront Strong Despite War
By Linda Moss -- Multichannel News, 3/7/2003 10:42:00 AM
New York -- Despite the lagging economy and looming threat of war, the coming TV upfront market will be strong, one leading Wall Street analyst said Friday.
"Going into the upfront market, there's a lot of steam, there's a lot of push behind it," Merrill Lynch & Co. Inc. analyst Jessica Reif Cohen told the audience at an International Radio & Television Society breakfast here.
Reif Cohen was part of a panel of four Wall Street analysts who gathered to discuss the current state of the media industry.
At the session, Sanford C. Bernstein & Co. analyst Tom Wolzien offered his own laundry list of programmers that he thinks "will probably be sold during the next five years" as part of the media-consolidation frenzy.
He cited not only the two networks AOL Time Warner Inc. is trying to sell its stake in -- Courtroom Television Network and Comedy Central -- but also Discovery Communications Inc., A&E Network and Scripps Networks.
In most cases, as he noted, those networks or companies are held by partnerships, rather than being wholly owned.
During her remarks on the advertising outlook, Reif Cohen acknowledged that due to current uncertainties regarding war and the economy, it is a "complete dichotomy" that the upfront marketplace is shaping up to a good one.
Nonetheless, the strong ad demand on a national level will be fueled in part by the large number of product introductions this year, including 20 to 30 new cars, she added.
During a recent conference, even media buyers were predicting that this year's upfront would be up, Reif Cohen said.
Both Porter Bibb, an analyst with MediaTech Capital Partners, and Chris Dixon, formerly with UBS Warburg LLC Equity Research, agreed that the old conundrum, "content is king," no longer holds true.
That's because Americans don't like the idea of paying for content that they've traditionally gotten free-of-charge, and to the fact that people are downloading content, like music, illegally on the Internet.
"All of a sudden, the issue is: What is it [content] worth, and who is going to pay for it?" Bibb said. "That puts a whole onus on the value of content."
Dixon chimed in, "Content with distribution is actually king."
During the panel discussion, Reif Cohen said the reality-programming craze on broadcast will impact cable three years now.
That's because reality shows, unlike dramas or sitcoms, have no shelf life and can't be syndicated. That means a dearth of off-network fare for cable in the future, Reif Cohen said, and cable may have to fill in the hole with more original programming.
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