Chicago -- Cable networks will lose major ad dollars if a la carte packaging
starts cutting into their national distribution, a major ad-agency official
warned Tuesday at the National Show here.
"At the national level, cable networks will be hurt dramatically," Joe Uva,
president and CEO of OMD Worldwide and a Turner Broadcasting System Inc.
veteran, said during a panel. "You'll see money going out of the cable networks
and you'll see money going out of the television medium."
The panelists were asked about their take on the impact if cable operators
start offering more networks on an a la carte basis.
Uva came out of the box swinging when he asked how many cable operators were
in the audience and only a handful of people raised their hands. He used that as
evidence of what he called his agency's concern that cable operators -- except
Comcast Corp. -- are not serious about local advertising.
"We're really not sure how important local cable advertising is to cable
operators and question their absolute commitment and investment," Uva said. He
added that the prospect of MSOs widely deploying set-tops with personal video
recorders was "a scary proposition for advertisers."
During the panel, Charlie Thurston, president of ad sales for Comcast Cable
Communications Inc., outlined his MSO's plans to create interconnects and
consolidate the markets where Comcast has a major presence.
Comcast is in 22 of the top 25 DMAs, and Thurston said 13 of those are
already interconnected, with plans for that number to rise to 20 shortly.
When asked about speculation that Comcast would do an upfront presentation
next year, Thurston said, "We'll see." He pointed out that the operator is
pulling its markets together and has a national footprint.
Panelist Joe Abruzzese, president of ad sales for Discovery Communications
Inc., said the price gap between cable and broadcast will close when cable
starts reaching sellout levels, like the "Big Four." It's all a question of
supply and demand, he added.