Cable networks continue to harvest a crop of dollars from Madison Avenue, collecting a record $4 billion in advertising revenue for the first six months of 1999, a gain of 29% over the same period a year ago.
The numbers signal that cablers could collect $9 billion by the end of the year, according to a new study released by the Cable Television Advertising Bureau, which compiles the numbers in partnership with the Broadcast Cable Financial Management Assn. and PricewaterhouseCoopers.
Total ad revenue for the big four nets — ABC, CBS, Fox and NBC — increased 6.8% to $16.27 billion last year and is expected to hover around the same figure this year.
Cablers brought in $2.68 billion in advertising revenue for the first half of 1998, the CAB reported.
In the past three years, cable network ad income has increased 78%, driven by the increase in original programming generated by cablers, as well as a more comfortable stance felt by advertisers who have taken to cable’s relatively lower prices and the ability of its niche networks to serve up targeted audiences.
Expensive rerun programming buys such as “ER” on TNT, “Party of Five” and “Chicago Hope” on Lifetime and “Xena” and “Walker, Texas Ranger” on USA, also continue to provide cablers high-visibility programming that galvanizes the attention of advertisers eager to get their messages out to as many eyeballs as possible.
“Based on these tremendous first half results, we expect cable network revenues for full year ’99 to be between $8 billion and $9 billion — a new record,” said CAB prexy and CEO Joe Ostrow.
CAB provides sales and marketing support to the cable industry. Members include cable networks and system operators, representing more than 85% of all U.S. cable subscribers.