New York -- Network-cable ad revenues rose 17 percent
during the first half of 1998, buoyed by basic cable's inroads into the
broadcast-television networks' viewership and by growing advertiser budgets.
According to the Cabletelevision Advertising Bureau, the
cable programmers' 17 percent uptick brought their ad sales to $2.68 billion, up
nearly $400 million.
The CAB data are based on monthly surveys of 22 cable
networks, conducted in association with the Broadcast Cable Financial Management
Association and PriceWaterhouseCoopers.
"Without a doubt," network cable's
percentage gain in the second half will surpass that of the first half, en route to a
projected record $7 billion in ad volume -- up $1 billion from 1997 -- Joseph Ostrow, the
CAB's president and CEO, said last week.
Ostrow added that a large factor in the growth was the
increased cable spending by advertisers "across a lot of categories," but
notably in automotive, proprietary drugs and telecommunications.
At Discovery Networks U.S., Bill McGowan, senior vice
president of ad sales, said cable's ratings growth is the "first and
"Revenue follows audience," he noted. Moreover,
there has been "an ongoing shift of dollars from broadcast to cable," he added,
and there have been strong spending categories, from telecommunications to entertainment.
At E! Entertainment Television, David Cassaro, senior vice
president of ad sales, saw the reason for the sales growth as "a combination of
growing budgets in categories across the board and money moving over to cable from
Ostrow and various cable-network executives have long
maintained that cable's
sales growth should be even stronger -- closer to its
ratings pace -- but such trends don't occur swiftly.
"It's like turning a tanker -- it takes
time," Ostrow observed. Cable's hefty revenue finish in the 1998-99 primetime
upfront -- up about 25 percent, compared with the broadcasters' flat finish -- was a
sign that the ad community's view of cable versus broadcast is changing, he said.
If anything, basic cable's Nielsen Media Research
ratings and share inroads have been greater during the second half.
Indeed, due to cable's "record-smashing summer
performance," Jonathan Sims, the CAB's research vice president, recently
predicted that this fall, will for the first time, the cable networks will notch a
primetime Nielsen share increase. That gain should be somewhere between 4 and 4.5 points,
Sims said, instead of the average 2.9-point share drop-off that cable has suffered in the
fall from 1994 through 1997.
Sims felt that erosion to cable would lessen the impact of
the "Big Four" TV networks' on-air promo salvos during the summer, which,
in turn, would mean reduced sampling of their new fall shows.
Cable's ratings have already jumped by 15 percent in
the first week of the new TV season.