With about 60% of business completed in the cable upfront ad market, cable is on track to reach the $2.8 billion total sales figure that its honchos optimistically predicted prior to the market.
A $2.8 billion upfront would be a 27% increase over cable’s take of $2.2 billion last year. The Big Four broadcast networks were flat at about $6 billion in this year’s upfront. NBC did about $2 billion by itself.
Media-buyers reported that general-entertainment cable nets, such as TNT and USA, were cutting deals at 5% to 9% price increases over last year. Channels with more specialized audiences, such as A&E, Discovery Channel and MTV, are getting CPM increases in the 8% to 11% range.
Cable is confident
“This is the first time that I’ve ever seen cable generate increases higher than broadcast in the upfront,” one buyer said. “There is a little frustration out there (among the buyers). Cable has more money working right now than they’ve ever had before and they’re projecting a confident attitude. They can afford to walk away from business that doesn’t comply with their wants and needs.”
“The market is obscenely robust,” said Larry Goodman, president, CNN sales and marketing.
Goodman said 20% of the business CNN is writing, a much higher figure than previous years, is from advertisers who have not previously purchased time on the news channel.
Because cable pricing is so high, several buyers said they will hold their ground looking for lesser increases or spend their money elsewhere, such as on broadcast networks.
Negotiations taking longer
The high pricing is also causing prolonged negotiations and cable sales execs and buyers now predict the upfront will continue until the middle of July. Previously, both buyers and sellers believed all business would be wrapped up by the July 4 holiday weekend.
The strength of the market is allowing cable networks to weed out clients paying lower CPMs and sell more inventory to their higher CPM advertisers.
“Most of these networks are in a position to push away business that is cheaper,” a buyer said.
Goodman added that CNN was doing a good deal of business with categories such as financial services, office products, communications and automotive.