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Nets’ New Shows Sizzle, But Can Cable Cash In?

4/17/2005 8:00 PM Eastern

New York— After hearing a half-dozen upfront pitches last week, Madison Avenue executives acknowledged that basic cable has finally put its money where its mouth is: The medium is anteing up big bucks for original content powered by big-name talent.

“Between both Lifetime and Turner, it looks there was a lot of investment in more original programming — not just a movie here or there, or series, but things they can actually build on,” said Sararuth Delice, a senior research analyst for Carat USA Inc.

Some of cable’s biggest entertainment channels — Lifetime Television, Turner Network Television and TBS — along with a triplet of more targeted services, Black Entertainment Television, Si TV and Sci Fi Channel, paraded their new programming for media buyers last week.

But it remains to be seen how much return cable’s stepped-up investment in original content will generate in the impending upfront market.

Last year, cable’s take in the upfront, the annual market bazaar during which agencies secure ad time for their clients for the upcoming TV season, was estimated at between $6.2 billion and $6.6 billion, an increase of $600 million to $900 million from the prior year.

In the latest wave of galas, the cable programmers trotted out an unlikely assortment of talent — ranging from Courteney Cox Arquette to author Stephen King, Pauly Shore and Kyra Sedgwick — to make pitches to ad agencies and advertisers.

Those efforts made some good impressions.

“What I’ve seen so far from the cable industry impresses me, because there’s more steak and less sizzle than I’ve ever seen from cable,” said Jack Myers, editor of Jack Myers Report, after attending the Turner and Lifetime affairs. “There’s really solid development; clearly millions and millions of dollars being invested in development by cable of original programming across the board.”

According to Myers: “The cable industry is really stepping up and investing in the big-name Hollywood talent, both at the show-runner level and at the on-screen level, to get great product. That’s new to me.

“You’re not seeing, 'Look at us, we did a 0.7.’ You’re seeing content and I think that’s a real change from past seasons.”

Cable-network officials were reluctant to make specific projections about the looming market. But most were bullish about cable’s prospects for growth and the odds of shifting dollars away from broadcast.

During Turner Broadcasting System Inc.’s presentation at the Theater at Madison Square Garden, David Levy, president of Turner Entertainment Group ad sales, reiterated the “One TV World” mantra.

“TBS and TNT truly are substitutes for broadcast,” Levy told the assembled ad execs. “You can use Turner to replace any broadcast network — ABC, NBC, CBS or Fox — and lose no reach.

“It won’t affect your frequency, and it gives you a cost savings that you can reinvest into sponsorships and promotions, or product integrations, that you may not have been able to afford.”

At least one-agency official offered a somewhat tempered forecast for cable, despite enthusiasm for TNT’s new fare.

Shari Anne Brill, Carat’s vice president and director of programming services, was impressed with two new dramatic series, The Closer and Wanted, and is looking forward to its 12-hour summer miniseries Into the West, produced by Steven Spielberg.

“For years, it’s always been thought that the quality of the programming offered on the cable outlets just wasn’t at parity with what broadcast did,” Brill said. “More and more, they [cable networks] are producing programming product that is at parity.

“But that’s not the base of their schedule,” Brill said. “The base of their schedule is still — and I’m not just saying them [Turner] specifically — a lot of off-network product.”

Cable faces some other obstacles in terms of the upfront. “Of course, everybody wants to go for more money, but I doubt that they’ll get to approach network-type CPMs, because it’s still being thought of as separate entities.” Also there’s a big supply of inventory from cable networks, Brill said, pointing out there are “at least 60 big guys,” plus the digital networks.

“The demand is there, but not to keep pace with all that supply,” she said.

Myers is already forecasting that cable and broadcast will do well this year.

“The whole television market is amazingly strong right now, cable and broadcast,” he said. “So far, all the indications are it’s going to be a reasonably strong upfront. … A lot of cable’s growth this year is going to be incremental money coming in to television, but I think the 'Media at the Millennium’ message has definitely resonated with the media planning community and is working overall.”

Delice, who also attended both Turner and Lifetime’s upfronts, liked what she described as the more light-hearted tone of the women network’s shows this year, like You’re Not the Man I Married.

“I remember usually watching those clips, and you’d see a tearjerker,” she said. “But this year it was a lot lighter, more comedy. Even a lot of their movies that speak to social points, they still weren’t presented heavily.”

But Delice wasn’t sure what this would mean down the line.

“I don’t know how it will be as far as the upfront and where dollars will be spent,” she said.

Lynn Picard, Lifetime Television’s executive vice president and general manager, is optimistic.

“More and more cable networks are investing in their networks,” she said. “It only makes sense that money would follow that, assuming the audience does as well.”

Both original shows and off-network series are an important part of the upfront mix for advertisers, according to Picard.

“Advertisers like to be involved in the originals because they know that there’s money behind them, the quality is there,” Picard said. “They know you’re going to promote them. They know you’re going to do everything possible to make them successful.”

MORE THAN ORIGINALS

Like Picard, Turner Entertainment president Mark Lazarus stressed it’s the total mix of TNT and TBS programming, and not just the originals, that lures advertisers.

“We believe the full complement of acquired series, acquired movies, original movies, original series, the mix of sports that we have — and the broad reach that we provide because of all that — is the draw,” said Lazarus, who wouldn’t specify the kind of revenue and price increases Turner expects from this year’s upfront.

NBC Universal president of national ad sales Jeff Lucas predicted its three cable networks — Bravo, Sci Fi Channel and USA Network, including the latter’s recently reacquired WWE fare — will pin significant dollars.

“Advertisers are looking for networks that have proven their value and we think our networks put a great product on the air,” he said.

Lucas said NBC Universal will sell cable-network properties as one package only where it makes sense: “We treat them as four separate entities that are efficiently priced.”

Lucas would not reveal how much of its cable inventory NBC Universal will put into the upfront market, but said it would match last year’s approach.

“We feel that we have a good balance of in scatter and upfront,” he said.

For Lifetime’s Picard, it’s a little to early make precise predictions about the cable upfront.

“We’re out doing our due diligence now,” she said. “No advertiser is going to tell you, 'My budget’s doubled,’ because they don’t want you to know that. …

“I don’t know how much money will shift, how much money will be new, how much may come from syndication, but I can’t imagine that there won’t be a nice increase in total money for cable. Everything points to it.”

Last year, the cable upfront moved in tiers, with Turner, USA, Lifetime and Discovery Networks U.S. moving together, and early.

“I would predict that to happen again,” Picard said. “We closed deals before Memorial Day.”

SI TV IS BULLISH

Si TV, the year-old English-language Latino network, has seven new original series for the coming season. This upfront, it will try to increase existing advertiser commitments, recruit new clients and offer custom branded opportunities to sponsors, according to senior vice president of ad sales Steve Levin.

“It seems that there is, as proven last year, a heavy gravitation to cable of advertisers, Levin said. “Some of the Nielsen methodology changes — People Meters, etc. — have shown a decline in the traditional broadcast networks, which is further stimulating the cable-commitment expansions.”

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