Upfront Could Rise By $1B

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Cable networks are hoping that the upfront market grows by
a nice, round number this year: $1 billion.

The ad-sales chiefs at Discovery Networks U.S. and E!
Entertainment Television estimated last week that the upfront market -- a measure of
ad-sales commitments for the 1999-2000 season -- would grow by that amount, to $3.8
billion. That would be about a 36 percent rise from last year's upfront.

Some other networks, and several Madison Avenue executives,
called that forecast overly optimistic. But the cable upfront did grow by about $600
million, or 27 percent, last year -- after Discovery senior vice president of ad sales
Bill McGowan had estimated a $500 million increase.

The upcoming season will benefit additionally from
millennium-related ads, the Olympic Games and the political campaign.

Despite the fact that "the media landscape will
continue to be fragmented," McGowan also estimated that the broadcast networks'
upfront take would grow by roughly $500 million, to $6.5 billion. Last year, most industry
sources put the TV upfront at a flat $6.2 billion, and not the $6 billion that McGowan
cited.

Moreover, McGowan and E! executive vice president David
Cassaro said, what each executive separately described as a "billion-dollar cable
bonanza" will be bolstered by increased spending from two categories in particular:
pharmaceutical and prescription drugs, and Internet-related advertising. The latter alone
is "growing by leaps and bounds," McGowan said.

Automotive, financial and entertainment are still other
segments expected to lift spending, added Bruce Lefkowitz, Discovery Networks' vice
president of national ad sales.

"A $1 billion cable increase is completely within the
realm of probability, and quite likely," Cassaro said. "If we don't hit the
magical billion-dollar mark, we'll be damn close."

In addition to benefiting the networks, a bumper upfront
might help operators if it allows programmers to absorb some of their rising costs without
passing them on in the form of higher license fees.

McGowan said there hasn't been a similar convergence
of events since 1976, which offered the Bicentennial, the Olympics and the presidential
campaign. "This [upfront] will be stronger than 1976," he maintained.

Back then, "there was no prescription-drug advertising
or Web advertising," he said, and the 1976 stock market was under 1,000 and not as
strong or expanding as today's.

Nor was cable much of a factor two decades ago, others
added.

At other networks, Lynn Picard, Lifetime Television's
senior vice president of ad sales, projected a $700 million to $800 million (25 percent to
30 percent) cable upfront rise, to the $3.5 billion to $3.6 billion range. She saw
TV's "Big Four" sales as flat.

A&E Television Networks senior vice president of
national sales Arlene Manos had a similar forecast to Picard's.

Turner Broadcasting Sales Inc., USA Networks Inc. and the
Cabletelevision Advertising Bureau were bullish but less optimistic.

Others declined to predict this soon: Broadcast
networks' upfront sales don't start until June, and cable's upfront winds
down by early July.

TBSI president of entertainment sales and marketing Joe Uva
foresaw "the best upfront ever for cable," with volume likely to "grow in
the 20 percent-plus range," to $3.3 billion or more. He said network TV will probably
climb by $500 million to $600 million.

USA Networks executive vice president of ad sales John
Silvestri estimated that cable's and broadcast's combined upfront growth could
be about $1 billion. "We're very bullish about the marketplace," but we
doubt that cable's growth will top 17 percent, he added.

CAB president Joseph Ostrow figured that cable's
upfront would top $3 billion, bolstered by "a continuing shift in dollars away from
broadcast -- as much as $700 million -- plus incremental dollars based on cable's
ongoing audience growth."

Broadcast-network executives weren't talking last
week. But previously, CBS executive vice president David Poltrack projected a 15 percent
rise in TV upfront sales, with the millennium's impact starting in the second half of
the year.

An ABC spokeswoman said executives would rather not
"negotiate in the press." In any case, she added, none of the Big Four has yet
chosen its schedule from among scores of pilots.

On the buying side, some agency executives predictably
looked at the same industry trends but arrived at different conclusions than the sellers.

Gary Carr, senior vice president at Western Initiative
Media Worldwide, felt that McGowan's upfront outlook should be taken with a grain of
salt:

"First, he's a salesman," Carr said.
"Second, it's his job to make these big predictions. Who really knows
[yet]?"

That said, Carr added that McGowan's "educated
guess" ultimately might not be far off the mark. "Cable definitely will get more
money," he added. "Cable is still growing, although it is coming from a smaller
base. He's not going to be too wrong, I would think."

As for the Big Four, Carr said, "They're still
doing well, despite ratings being down."

McCann-Erickson WorldGroup senior vice president Robert
Coen was unimpressed with Discovery's crystal-ball gazing.

"It seems high to me," he observed. "Anybody
who's got an ax to grind, their opinions are worthless. It's all kind of
self-serving."

Coen added, "The media themselves try to whip up a
frenzy" on the buyer side.

BBDO Worldwide senior vice president Chris Geraci felt that
McGowan's upfront predictions were too bullish.

"In broad strokes, it is going to be a strong
marketplace," Geraci said. "If [McGowan] thinks that much money is coming, God
bless him. But it is highly unlikely to grow to that extent."

Myers Consulting Group senior vice president Joe Mandese
felt that Discovery's forecast "looked a little aggressive, but it may be
feasible."

The economy remains strong, he said, and agency
buyers' greater reliance on optimizers in this upfront "should work in
cable's favor."

Myers had put its calendar-year forecast for 1999
cable-network-sales growth at 17 percent, but it "will probably revise that
upward" soon, Mandese said, adding that Myers forecast 2000 growth at a "robust
27 percent."

Linda Moss contributed to this story.

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