Cable Upfront Estimate: $7.65 Billion, Up 9.3%10/10/2008 8:00 PM Eastern
The Cabletelevision Advertising Bureau estimates that ad-supported cable networks tallied some $7.65 million in upfront revenue for the 2008-09 season.
That figure represents a 9.3% increase from $7 billion for the 2007-08 Madison Avenue bazaar, according to CAB.
The group said the $650 million improvement in upfront revenue stemmed from advertisers' recognition of the medium's ratings and reach gains over the past TV season. Moreover, the success of ad-supported cable's original programming, complemented its well-established brands, fueling multiplatform solutions for a growing number of sponsors, according to the CAB.
“We're confident advertiser demand will continue to increase on the merit of audience gains driven by cable's rich mix of successful original programming and proven acquired favorites housed inside video's most powerful brands,” CAB president and CEO Sean Cunningham said in a statement. “Cable's performance has earned the cornerstone of any major advertiser's media plan.”
Jack Myers Media Business Report, meanwhile, pegged cable's 2008-09 upfront sales at $7.8 billion, an 11% to 12% rise from the prior season.
Ad industry analyst Myers put the cable industry upfront's cost-per-thousand advances in the 6.8% to 7.5% range, with TBS/TNT, USA Network, Scripps and ESPN generating CPM gains averaging between 8% and 9%.
The cable news networks' CPMs were also strong.
Myers also cited cable's rating growth, plus larger subscriber base as reasons for the improvement. The report noted that the availability of an increased inventory supply often has a negative impact on costs.
In addition to CPM gains, cable sold an estimated 10% to 12% more inventory in this year's upfront, compared to the prior season.
Going forward, several reports last week cited downward revisions in analyst forecasts for ad spending here and abroad.
ZenithOptimedia, according to reports, slashed its forecast for U.S. ad spending to 1.6% this year and to less than 1% in 2009. That's down from June forecasts from the Publicis Groupe unit of 3.4% and 2.6% growth this year and next.
Worldwide ad spending is now forecast to grow by 4.3% to $506.3 billion this year and 4% in 2009, Zenith said. That was down from June forecasts of 6.6% growth this year and 6% growth in 2009.
Barclays Capital last week was reported to have revised earlier forecasts negatively. Broadcast network revenue is now projected to drop 8% in 2009, while cable networks are seen as seeing only 1.8% revenue growth, according to various reports.
Barclays sees U.S. advertising spending across electronic and print media falling 3.6% this year and a further 5.5% in 2009.