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Cable ads up, but . . .

Major migration from nets isn't happening

The cable upfront advertising market began to move in earnest the latter part of this week with about 50% of business done at mid- to high single-digit price increases compared to last year.

Marketplace sources said the cable upfront will easily exceed last year’s $2.2 billion market, but the pre-upfront prediction that cable would suck $500 million to $600 million from the broadcast networks now seems overly optimistic.

Joe Uva, president of Turner Entertainment Sales, however, maintained that cable should still be able to take more than $300 million away from the broadcast networks. The four big broadcast networks ended their upfront market either flat or slightly down, depending on whom one believes, from last year’s $6.05 billion.

“The shift from broadcast to cable is accelerating,” Uva said.

Showing some resilience

Media buyers agreed that cable will have a strong upfront, but they added that the broadcast network did show some resilience in taking in $6 billion this year.

“Even with the audience erosion, the broadcast networks are as strong as ever,” said Bill Croasdale, president of broadcast for Western Intl. Media.

Estimates on cable cost per thousand (CPM) increases averaged in the 5%-to8% range. David Cassarro, senior VP, ad sales, for E! Entertainment Television, said that cable price increases will range from 7% to 12%, with cable networks that target younger, higher-income viewers getting the double-digit increases.

More inventory with cable

Buyers said it’s easier to negotiate with cable networks, compared to the broadcast networks, because there are dozens of cable networks to play off against each other and cable networks have much more inventory to sell. Because the broadcast networks have less inventory to sell, buyer demand can easily jack up prices.

“I’m about at a third of where I want to be,” said one slightly less cheerful cable ad sales executive. “It’s cable: It’s not like we’re going to run out of inventory.”

Both buyers and sellers agreed that, like the broadcast upfront, the cable upfront was proceeding at a much more orderly pace than last year.

Uva said the telecommunications category was up substantially. He added that pharmaceuticals and financial services such as mutual funds and credit card companies were also strong this upfront.

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