Surprisingly Strong Cable Upfront Sales Pacing At Almost $8 Billion

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Cable is wrapping up what’s turning out to be a robust upfront market for the medium this year. Many cable networks have completed their deals, with the rest expected to be done by around the Fourth of July.

Estimates for TV sales during the upfront ad market always vary, but industry sources so far are pegging cable’s overall dollar-volume gains at somewhere between 8% to 10%, or $560 million to $700 million. Those increases would bring cable’s upfront sales, which the Cabletelevision Advertising Bureau pegged at $7 billion last year, to $7.7 billion or more.

Broadcast racked up just over $9 billion during its upfront this year.

Turner Broadcasting, NBC Universal’s cable entertainment networks, Fox Cable Networks’ entertainment services, Lifetime Television and Hallmark Channel are among the cable programmers who have sewn up—or just about completed—their upfront business.

“We’re 90% done,” Bill Abbott, Hallmark Channel’s executive vice president of ad sales, said Thursday. “We anticipate that by the end of the week we’ll be finished.”

Turner completed its upfront business last Friday, according to David Levy (pictured), president of Turner Broadcasting Sales.

But cable ad-sales executives said that a number of second-tier and third-tier cable channels are still trying to finalize upfront deals.

Shrugging Off Lousy Economy

Some ad-sales officials had feared that the troubled economy would put a clamp on upfront sales, but that was not the case for cable or even broadcast, several sales executives said this week.

“During times when you have a challenging economy, which we’re all sort of addressing right now, advertisers look to mediums and to distribution platforms that they know they can rely on—and sort of trust—with their message and budgets,” Levy said. “And television is still the most efficient and effective place to advertise.”

Turner was at the “high end” of upfront price and dollar-volume increases for “all of television, not of cable, but of TV,” according to Levy.

He declined to offer specifics, but Turner reportedly saw upfront CPM increases that hit 9% to 10%, and saw a gain in revenue of 20% to 25%, according to some officials.

This year for the first time Turner sold a “broadcast-replacement package” of all-original programming that airs on TNT, TBS and TruTV, and the programmer received a premium price for those packages, according to Levy.

“Advertisers really embraced it,” he said.

Turner now has a long roster of original hits on its networks—such as TNT’s The Closer and Saving Grace, and TBS’s The Bill Engvall Show and Tyler Perry’s House of Paynethat provide enough ad inventory to package and sell together.

Hallmark Channel also enjoyed a strong upfront, according to Abbott.

“We did extraordinarily well,” he said. “We were up nearly 20% in volume and CPMs (were) up overall in the high single-digits. Advertisers continue to react positively to our original product …and our brand and our environment.”

The network has sold entitlements—exclusive sponsorships with a reduced commercial inventory of just four minutes an hour—for about 20 of its movies this upfront, according to Abbott. Hallmark Channel’s original movies are a strong draw for sponsors, he said.

“They are our calling card,” Abbott said. “They deliver our highest ratings. They deliver solid demographics. They are the essence of the brand.”

FX, National Geographic Channel and Fox Reality Channel are essentially done with their upfront sales, according to Bruce Lefkowitz, executive vice president of ad sales for Fox Cable Entertainment Networks. 

As for the overall cable upfront market, he said, “It was surprisingly robust. The surprise comes from the fact that there were so many economic uncertainties overhanging the marketplace that just didn’t seem to materialize.”

He added the fact that primetime broadcast has seen a decline in gross ratings points helped cable.

“The fact is the GRPs were down this year and advertisers need their GRPs in any economy, most specifically in one as trying as the one that we’ve been going through,” Lefkowitz said. “So that money has to go somewhere, and cable continues to grow and cable continues to provide a very strong alternative.”

Packaging Digital, Video Content Pays Off

National Geographic Channel, a partnership of National Geographic Ventures and Fox Cable Networks, is more than 90% done with its upfront deals and is seeing a more than 20% increase in revenue versus last year.

Richard Goldfarb, Nat Geo’s senior vice president of media sales, attributed cable’s strong upfront sales to broadcast’s audience erosion, broadcast’s lack of scripted content due to the writers’ strike and broadcast’s “over-reliance on reality programming.”

Nat Geo has lined up two dozen new advertisers this upfront and has seen 50% growth in its digital revenue, according to Goldfarb.

“We have done a lot of business with our video-on-demand platform, which by the way, is now up to 30 million subs,” he said.

Lifetime essentially concluded its upfront business nearly two weeks ago, and saw CPM increases in the 9% to 10% range, and volume growth of 22%, according to Debbie Richman (right), Lifetime’s executive vice president of ad sales.

“We had a great upfront,” she said. 

The women’s programmer also saw strong ad-sales gains on its digital offerings, in packages that included TV shows along with MyLifetime.com.

“We saw almost 100% growth on our digital platform,” Richman said. “We did sell a lot more cross-platform initiatives with upfront. It wasn’t just selling Internet packages. It was extensions to TV packages. That’s a big change for here.”

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