Denver -- Cable operators, enjoying a "golden
age" in ad sales, nonetheless are eager to "mine gold" from new and
existing local revenue streams, as one panel proclaimed at the Cabletelevision Advertising
Bureau's Fifth Annual Local Cable Sales Management Conference here last week.
Several speakers referred to "the golden age of cable
ad sales," including Leo J. Hindery Jr., president and chief operating officer of
Tele-Communications Inc.; Joseph Ostrow, the CAB's president and CEO; and Gene
Jankowski, president of Jankowski Communications.
Ostrow, who forecast that cable should surpass $10 billion
in ad sales in 1999 and $12 billion in 2000, told the 1,100-plus attendees that
cable's current winning ways in viewership and ad volume "should make us all
feel a mile high." But, he cautioned, those gains won't be handed to cable
"on a silver platter."
Jankowski, onetime president of the CBS Broadcast Group and
current sales executive, cited the latest Veronis, Suhler & Associates Inc. forecast
as expecting cable to top $14.9 billion in annual ad sales by 2001, when local and
national spot cable will account for $4.1 billion. Digital ad-insertion technology and the
resultant increase in inventory at the local level will be key drivers of local's
growth, he added, again citing the investment banker's report.
Despite that bullish outlook, Jankowski warned cable
against focusing too much on pricing. "Don't train your customers to buy on
price instead of image ... Do you merely sell ad time, spots and dots on a schedule? Or do
you sell ideas based on your customers' needs?"
Echoing a point made in Turner Broadcasting Sales Inc.
presentations of the past two years, Jankowski said, "You are representatives of the
television industry, and not merely cable. You do yourselves a disservice when you think
cable versus broadcast."
Despite cable's ratings surge, Bill Stanfield,
president and chief operating officer of StarNet Inc. and Radius Communications and the
CAB's co-chair, complained that cable still gets just 2 percent of available local ad
Adding insertable channels is one major way to boost local
volume, said Wes Hart, Marcus Cable Co. L.P.'s director of ad sales, but he added
that this can no longer be done as "haphazardly" as in the recent past.
Moreover, he said, operators must try to spread the sales wealth more evenly among those
channels. On average, Hart added, only six out of 20 channels command 70 percent of an
operator's local volume.
Kelly Ryan, promotion manager at Time Warner Cable Adcast,
said decisions on additional insertable channels in Charlotte, N.C., were based in part on
what new or complementary demographics they could bring and on what new accounts they
For the new TCI, Hindery said, "The word
'partnership' is key," in ad sales and beyond. He cited the various market
consolidations that came from partnerships with other MSOs, and he noted that Jerry
Machovina, TCI's executive vice president of ad sales, convinced him that a
whole-market approach made far more sense that a partial-market approach. That, he said,
explained TCI's leaving such major markets as New York and Los Angeles. In New York,
he said, "Jim [Dolan, CEO of Cablevision Systems Corp.] and Joe [Collins, chairman
and CEO of Time Warner Cable] won the war, and they deserve the spoils."
Hindery also cited TCI's partnership with Kraft Foods
in developing the future concept of addressable advertising. He lauded the food giant for
"taking a flyer on interactivity." And he cited alliances with Silicon Valley
companies and the AT&T Corp. merger as contributing to the evolution of television --
from "centerpiece of the living room, to nerve center of the home" -- and to the
convergence of the TV, the personal computer and the telephone.
A CAB panel on "Mining Gold from New Revenue
Streams" focused on one MSO's sales success with a regional-news channel, on
another's with a local-origination channel and on yet another's with the
hard-to-crack grocery category. Moderator Jack Olson, vice president of the Media Partners
division of Adelphia Communications Corp., urged others to likewise "modify our
strategies [and] ... be innovators."
Cox Communications Inc.'s Cox CableRep teamed up with
MAC America's KTVK on the 400,000-subscriber Arizona NewsChannel, and 33 percent of
that channel's clients are exclusive to it, noted Sharon Boyd, its sales manager.
Allan Eisenberg, ad-sales director at Greater Media Cable,
said his company "mined gold" with its LO channel, which it positioned as an
independent station, WGMC-TV/Channel 3. That channel accounted for 15 percent of the
company's $4 million in ad volume last year, he added.
Still other attendees pointed to the Internet and to
photo-advertising channels devoted to real estate and classified ads as revenue producers.