Upfronts Battle Lines Are Being Drawn

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Various buyers and sellers of commercial time late last
week expected cable's upfront to top last year's $2.3 billion, perhaps by as
much as $500 million, but they're unclear so far how much of the growth will come at
the expense of the broadcast networks.

The Big 4 tallied $6.2 billion in last year's upfront
but now seem to be facing a sluggish upfront marketplace.

As a whole, agency buyers tend to play down bullish
projections while network sellers talk them up.

Tom Winner, director of broadcast media at Wieden &
Kennedy, which handles Nike and Microsoft Corp., said cable avails have been very tight
into the second quarter, with scatter prices "significantly above"
upfront's, whereas the Big 4 TV networks, very heavily sold in the last upfront, are
seeing "very light" demand in scatter.

"It will be interesting to see how this plays
out," Winner said.

Referring to a published report that this could be "a
watershed year" for cable, Winner said, "That sounds rather dramatic."

Bargaining might break in June and stretch into August, he
felt, since the syndicators seem "in no rush" for their upfront -- and the
kids' upfront logjam has yet to break.

Jon Mandel, senior vice president at Grey Advertising, said
it's "much too early" to discuss the primetime upfront. But he seemed to
question the credibility of those who tout a blockbuster cable upfront when he said that
many of these agencies "never bought a unit of network TV."

Rick Sirvaitis, president of ad sales for Fox Family
Channel, noting that it is "somewhat unusual" for the Big 4 to be in their
light-demand situation, expressed confidence that cable's upfront will enjoy
double-digit growth, though he said it is hard to be precise when agencies
"won't tell us" yet what they'll be allocating.

John Silvestri, executive vice president of ad sales at USA
Networks, also anticipated "significant new dollars coming into cable" --
perhaps $400 million -- but he could not guess how much would shift from broadcast.

Likewise bullish on cable, David Cassaro, senior vice
president of ad sales for E! Entertainment Television, said he expected a substantial move
from TV to cable. "The question is how substantial," he said, speculating that
it should be $500 million or more.

Some of the sales growth will be from increased spending by
pharmaceutical, telecommunications, entertainment and other categories, said Silvestri and
Cassaro.

While various buyers consider fragmentation and commercial
clutter as key concerns to be addressed in the upfront, Winner cited program environment
and cost-per-thousand homes as his agency's big issues.

"I haven't heard one person say increased
commercial clutter is a problem in cable," said Cassaro, who felt it will be a
problem for ABC, since it has added a lot of primetime inventory.

Last month, other cable executives also painted a rosy
upfront picture. Nick Davatzes, president and CEO, A&E Television Networks, described
cable's upfront outlook as "very robust," given the healthy economy and
cable's ongoing audience growth. Steve Heyer, president and COO, Turner Broadcasting
System Inc., pronounced the outlook for cable as "very strong."

Heyer has predicted that up to $1.3 billion could shift
from broadcast to cable networks in this upfront, due to fragmentation and TBSI's
"Media at the Millennium" reach studies, but few others, on the buying or
selling side, are going out on that limb.

While echoing Turner's "Millennium" results,
John Popkowski, president of U.S. ad sales for MTV Networks, felt it will take a while to
convince buyers that they can get similar primetime reach by buying several cable networks
rather than spending on high-priced nights and programs like NBC's "Must See
TV" and the $2 million-a-unit Seinfeld finale.

As for the use of optimizers, ad buyer Winner doubted those
computer-software analysis tools will be used much in this upfront.

"I don't think they'll play much of a role
this time around," he said.

Optimization "focuses on ratings and cost," so
cable's lower rates should make it more attractive, he said, but he cautioned that
buyers and planners need tolearn more about incorporating subjective elements in
their optimizers.

David Poltrack, executive vice president of research and
planning, CBS Television Network, told the Association of National Advertisers TV forum
last week that buyers must factor attentiveness and other qualitative data into their
media-planning equations.

"If we've reduced everything to a commodity ...
[and] if there's no premium paid for high-quality programming, the media is going to
deteriorate," Poltrack said.

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