NEW YORK — Cable networks didn’t prove as big a threat to broadcasters as they’d hoped this year, but still scored gains in the upfront market.
With most of the business completed in a leisurely paced market, cable networks are expected to sell about $2.2 billion in the upfront, up 22% from perhaps $1.8 billion last year, buyers said. The Cabletelevision Advertising Bureau, which promotes the cable industry, more bullishly projects a $2.4 billion to $2.5 billion market.
The volume gains are due in part to improved ratings. But they mainly stem from a decision by major cable players like Turner Broadcasting and Viacom’s MTV Networks to sell more of their total inventory in the upfront market.
While broadcast networks typically sell about 80% of their ad pool in the upfront, established cable networks — with far more spots to sell — historically have sold 40% to 50%. Many are now selling 60% of their available time, so when yearlong sales in the so-called scatter market are included, total volume gains won’t be nearly so pronounced.
“Everyone’s going after share,” said one buyer. “I don’t believe there’s any major influx of dollars” from broadcast.
Broadcast networks sold $6.2 billion in the primetime upfront market, up 9% from last year, with cost-per-thousand or CPM price increases ranging 7% to 9% for ABC to 12% to 14% for NBC. National barter syndication’s take was $2.2 billion, up 10%, with a wide range of price hikes.
In cable, CPM gains were modest, typically in the 4% to 6% range, despite pleas from some cablers to command premium rates for what they see as greater parity with broadcasters.
“The (broadcast) networks continue to get higher CPM increases than cable networks, which is a function of the marketing community’s thinking that primetime is still a must-buy,” said John Popkowski, exec VP-sales at MTV Networks. “There is a slow but sure migration to cable, and more money is moving to cable in an upfront posture. People are realizing they can’t wait (to buy) cable whenever you feel like it.”
Still, “there’s no rush or stampede to close deals on the part of the networks,” said one buyer, so the market, now about 75% complete, threatens to “drag out interminably.”
Sellers seemed pleased with sales activity. Despite lower-than-hoped-for unit-price increases, “our dollar volume was quite frankly beyond what we expected,” said Larry Goodman, president of news and operations for Turner’s sales operation, which commands about 25% of all cable ad dollars, according to estimates from Paul Kagan Associates.
Goodman says Turner’s non-kids business, which includes TBS, TNT and CNN, sold nearly two-thirds of its inventory, up from 42% last year, and increased revenues from incumbent advertisers on TNT and TBS by as much as 40%. He declined to release total ad volume, pegged by Kagan at $1.1 billion for calendar 1997, but Daily Variety estimates its upfront take at close to $700 million.
Fledgling networks like CNN/SI and CNNfn are being packaged with other buys.