News

Ops, Interconnects Offer Mixed Forecasts

1/14/2001 7:00 PM Eastern

Striking the same chord as cable-network executives did in sizing up the 2001 outlook last November, MSO and interconnect executives were unable to reach a consensus in forecasting ad-sales results for the new year.

Some were bullish, like their cable-network colleagues. But others interviewed recently were more reticent.

"The old year went fine, with not as much gloom and doom on the local side as has been talked about on the national side," said Time Warner Cable vice president of ad sales Larry Zipin.

Time Warner closed the fourth quarter with an 18- percent sales uptick, which brought its full-year increase to 21 percent-just ahead of a planned 20-percent surge.

The year 2000 was a good one for Comcast Corp., which surpassed its revenue goals, said senior vice president of ad sales Roger Sverdlik.

He declined to release percentages, citing corporate policy. However, he said, overall "local grew in modest double digits," but was far outpaced by national and regional business.

"Local is by no means mature yet," he said. "Local cable will continue to grow its share because it's underutilized.

"The first seven months were pretty explosive, but then the rest of the year was definitely tougher," he added, echoing other MSO sales execs. However, Comcast's systems and interconnects did pretty well in the political sector, Sverdlik said.

Political sales "also ended up as good news" for AT&T Broadband, said senior vice president Judi Heady. That's because the MSO operates in a lot of so-called swing states.

Also significant for AT&T were the communications, entertainment, financial and healthcare categories, Heady said.

Time Warner's standout categories last year included health care, retail and furniture on the local level and technology, entertainment and travel both nationally and regionally, according to Zipin. Automotive sales were strong locally and nationally, but local dealers' cutbacks hurt late in the year.

Zipin said political ads and the Summer Olympics were major disappointments. But the MSO's traditional core business overcame those obstacles, he said.

AT&T Broadband could not yet discuss sales results for the fourth quarter and full year, and it also does not release percentages, per corporate policy. But Heady said the company was pleased with how sales went over the first nine months of the year.

"There has been a softening in the second half, but it was not that significant," she said.

Looking ahead to 2001, Zipin noted that the sluggishness in the national-sales arena is now trickling down to the local level. Coupled with slumping sales at auto dealers and retail stores-local cable's top two categories-that could hurt operators, he said.

Time Warner Cable has been "very soft" in terms of first-quarter business booked through the first week in January, but Zipin emphasized that it's too soon to project how the quarter will finish.

Comcast's quarter was also "starting a little slow, although we're pretty much on target," said Sverdlik. "There's no way the sky is falling."

The tough retail environment recently spelled doom for Montgomery Ward LLC and Bradlees Stores Inc.

"Montgomery Ward did buy from us in our central division, so that's an unfortunate loss," Heady said. But Zipin said the major retailer shutdowns probably would not hurt Time Warner much.

"They typically don't buy a lot of local cable and I doubt they buy much spot cable," he said.

Generally speaking, Sverdlik predicted, "We see February and March as stronger [than January] and an advertising recession will be unlikely."

Want to read more stories like this?
Get our Free Newsletter Here!
September
October

VR 20/20

The Times Center, New York, NY