Bullish Upfront Opens for Cable

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New York-Cable beat broadcast to the punch last week when its upfront broke early, before that of the "Big Four."

In what was apparently a first, cable's ad-sales marketplace for the 2000-2001 season took off prior to that of its broadcast brethren, whose upfront presentations are slated for this week.

"It's unprecedented," Lifetime Television executive vice president of sales Lynn Picard said. "Last year, we were running concurrently."

Cable ad-sales executives are projecting that cable sales will be up 25 percent to 30 percent over last year, to anywhere from $4.6 billion to $5 billion, as advertisers shift some money from broadcast to cable.

A number of cable programmers, such as Lifetime and USA Network, were reporting double-digit CPM (cost per thousand homes) increases, mainly in the mid- to high teens.

In addition to Lifetime and USA, officials at Turner Broadcasting Sales Inc., Discovery Networks U.S. and A & E Television Networks said they were doing brisk business last week.

"We have worked late into the night and done several pieces of business," USA Cable executive vice president of ad sales John Silvestri said. "We put a lot of money on the books. It's very positive. It's a very strong marketplace."

At Turner, executives said through a spokesman early last week that cable upfront sales had broken in a major way and that they had written "a ton of business." Individual clients' budget increases on Turner Network Television and TBS Superstation were as high as 28 percent to 50 percent above last year's levels.

By last Thursday evening, Turner's upfront was "breaking like crazy, with CPMs in solid double-digits," the spokesman said.

Last Friday morning, Turner Entertainment Sales executive vice president Liz Janneman said TBSI would "close 70 percent to 80 percent" of its entertainment-upfront business by that afternoon at 3 p.m.-well before network television even gets rolling.

That figure was in contrast to the traditional "40 percent or 50 percent" in upfront business prior to the broadcast networks' marketplace in the recent past, the spokesman said.

Among the categories showing significant upticks in budgets were entertainment, automotive and pharmaceutical, while telecommunications was down, as expected.

Janneman said Turner's recent 28 percent upfront-dollar projection-to $4.6 billion-"will be right on the money."

Picard said Lifetime had 50 percent of its upfront sales completed by the end of last week. Advertiser budgets this year are up 25 percent to 30 percent, but she said Lifetime's upfront business is outpacing that. "Budgets are up, and there's a shift of money from broadcast to cable," she added.

Cable officials had a number of theories as to why the cable upfront broke earlier than that of broadcast.

Picard cited Lifetime's higher ratings and original shows such as Any Day Now, which are drawing positive feedback from advertisers.

Cabletelevision Advertising Bureau president Joe Ostrow said the cable upfront broke early this year because cable "has come of age. Our audience growth has slowed a bit, but it's still ahead of last year. Planners and buyers are looking more to the targeting ability of cable, and they have made a commitment to that targeting."

A & E executive vice president of sales and marketing Ron Schneier said media buyers are "trying to soften the amount of money for the broadcast networks," which expect a strong market.

He added that cable's cost efficiencies continue to be superior to those of broadcast. Schneier also said that in a strong market, advertisers look to build a base with cable, racking up ratings points to help fulfill their requirements, which makes them less dependent on broadcast and gives them more leverage in negotiations with the Big Four and others such as The WB Television Network.

Schneier said upfront sales for The History Channel are doing especially well because media buyers looking for male demographics are trying to find ways around buying pricey sports. "They're looking for alternatives to sports to reach men," he added.

Several factors contribute to the strong cable upfront, Janneman said. The economy is healthy, and the scatter marketplace has been "very aggressive" since late last year, so clients want to commit earlier to get pricing at the lower end of the scale.

But not all buyers are joining in the rush to do business. Among those taking a wait-and-see stance was SFM Media LLC president of national broadcast Jerry Solomon, who said, "We haven't done anything yet. We don't know any CPMs yet."

One other executive cautioned, "When you hear CPM percentage increases, they can be suspect. Many of those publicized increases are for different types of advertisers and coming from different bases," in terms of the volume of their business placed. An advertiser can increase its CPMs by 15 percent, but that may be from a low base.

Sources said networks categorize their clients by quintile, with those in quintile 1 or 2 at the lowest rungs and those in the fifth quintile at the high end of the spectrum.

Networks will often try to offer incentives to those in the fourth and fifth quintiles in order to hold on to them as clients, even as they give lesser incentives to those on the low end in hopes of increasing their spending.

While cable networks have basically completed their upfront presentations, broadcast networks will kick off their upfront presentations this week. There are a number of open questions about their schedules.

For example, the future of both NBC's hit Friends and Fox Broadcasting Co.'s The X-Files is somewhat in limbo. The Friends cast is negotiating new deals, and X-Files star David Duchovny has been less than enthusiastic about continuing with the show.

USA contended that it hasn't been hurt in the market by the prospect that it may lose programming from World Wrestling Federation Entertainment Inc. The WWF is being sought by CBS Corp. and Viacom Inc., and the matter is in litigation.

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