[opendtv] News: Cable Ad Dollars Catch Up
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 20 Jun 2011 13:44:55 -0400
http://online.wsj.com/article/SB10001424052702304070104576395633720874782.html
Cable Ad Dollars Catch Up
'Upfront' Outlays for Commercial Time Hit Milestone: Matching
Broadcasters' Tally
By LAUREN A. E. SCHUKER And EMILY STEEL
Advertisers, for the first time, are shelling out as many dollars to
book commercials in advance on cable television as they are on
broadcast networks, allowing cable outlets to command big increases
in their ad rates.
The uptick in the cable market follows a strong "upfront" for
broadcast, the annual round of deal making in which the Big Four TV
networks sell ads for the coming season. Buyers stepped up their
upfront spending this year despite the broadcast networks' shrinking
audience.
While ad buyers say upfront negotiations with the cable networks are
expected to continue until the end of the month, people close to the
negotiations say that ad deals for the biggest cable channels are
almost wrapped up, and that rates have risen between 9% and 16% from
last year, depending on the network. The increase, they say, mostly
reflects advertisers' eagerness to reach the growing audience for
cable programs.
People familiar with the deals estimate that cable's total volume of
ad commitments for the coming season have grown by about 15% from
last year, which would bring total spending on cable advertising to
between $9.1 billion and $9.3 billion-reaching the milestone,
analysts say, of roughly matching the broadcast industry's tally.
Last year, the cable-TV upfront fetched about $8 billion in
commitments, about 93% of the value of the broadcast networks'
upfront take, according to a report issued by investment bank
Barclays Capital.
"There are two drivers that have helped bring cable to parity with
broadcast," says Anthony DiClemente, a media analyst at Barclays
Capital. "One is the shift of viewers from broadcast to cable, which
boosts cable ratings and inventory available for sale, and then also
the narrowing of the pricing gap between broadcast and cable
inventory."
While broadcast networks have watched their audience slip, cable
channels have seen their viewership grow in recent years. During the
past TV season through June 12 about 4% fewer people watched
prime-time shows on the four most-watched broadcast networks than in
the previous year's season, according to ratings tracker Nielsen Co.
The prime-time audience for ad-supported cable networks, meanwhile,
increased by more than 4% from the previous season.
In recent years, cable networks have gotten more aggressive in
courting advertisers with high-profile shows, including Conan
O'Brien's evening talk show on TBS and TNT's flashy high-budget
sci-fi thriller, "Falling Skies," whose executive producer is Steven
Spielberg.
Several broadcast stars also have made the switch to cable. Speaking
Thursday at the National Cable & Telecommunications Association's
annual conference, Oprah Winfrey told audiences she is "all in" with
her new cable network, OWN.
In addition, niche reality shows like "Swamp People" on A&E
Television Networks' History Channel and the tattoo-culture franchise
on Discovery Communications Inc.'s TLC's, have grown increasingly
popular with audiences and advertisers alike.
Earlier this month, "Swamp People"-which chronicles the adventures of
alligator hunters in Louisiana-hit a series high when more than 4.5
million people tuned in to a Thursday night repeat.
People close to the cable negotiations say that prices to lock in
commercial time on Time Warner Inc.'s TNT and TBS networks are up by
about 12% or 13% from last year, while Viacom Inc.'s MTV
Networks-which includes Comedy Central, VH1, and MTV, the home of
"Jersey Shore"-has seen rates increase by 10% or more. Ad volume at
MTV Networks also are up by "double digits," according to these
people.
Likewise, female-oriented networks are in high demand among
advertisers, with Bravo, E!, and Oxygen, owned by Comcast Inc.'s
NBCUniversal, imposing increases from 11% to 14%.
Discovery's top networks have won rate increases in the range of 10%
to 12% from last year, according to people familiar with their sales.
Broadcast networks, by contrast, saw prime-time rates rise by about
9% on the low end, for NBC, and by 13% to 15% on the high end, for
CBS Corp.'s namesake network.
USA, the highly rated NBCU-owned cable network whose hits include
"Burn Notice" and "White Collar," won rate increases of roughly 13%
to 16%, according to people familiar with the network's negotiations.
The network averaged more than three million prime-time viewers over
the past TV season, the most of all cable networks, according to
Nielsen.
Write to Lauren A. E. Schuker at lauren.schuker@xxxxxxx and Emily
Steel at emily.steel@xxxxxxx
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