[opendtv] News: Cable networks see 17% to 20% increase in 'upfront' salesof ad time
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 9 Jun 2004 10:10:30 -0400
Via ShopTalk
Cable networks see 17% to 20% increase in 'upfront' sales of ad time
By Michael McCarthy
USA Today
NEW YORK -- In this year's "upfront" selling season, cable networks
are giving the established broadcast giants a good fight in the
annual battle of the network stars over $18 billion in ad sales.
The six major broadcast networks -- NBC, CBS, Fox, ABC, WB and UPN --
have long dominated the upfront, where TV companies try to presell
about 75% of their ad time for the upcoming season.
But now cable networks have reached a tipping point of attracting
more total viewers. As the upfront nears its finish line this week,
cable networks will boost their upfront sales 17% to 20% to $6.6
billion vs. a 2.2% drop to $8.9 billion for the six broadcast
networks, predicts analyst Jessica Reif Cohen of Merrill Lynch. An
estimated $600 million has migrated so far, says media forecaster
Jack Myers of Jack Myers Report, with an additional $200 million on
the way.
Cable networks drawing top interest: Viacom's MTV Networks, which
includes nine networks led by MTV and Nickelodeon; Turner
Broadcasting System, which includes TBS, TNT and CNN; and NBC
Universal, with USA and Bravo.
MTV Networks, for example, has sold about 85% of its ad time. It
likely will post a dollar increase of 15% to 20%, with its rate per
1,000 viewers up about 8%. Of the money shift to cable, MTV Networks
President Mark Rosenthal says, "We don't know how much yet, but we
know we will be a prime beneficiary. We're ecstatic."
Turner, boosted by the arrival of Sex and the City reruns, will
increase sales an estimated 20%, off price increases of 9% to 10%.
Marketers are looking for more sponsored programming opportunities,
reports David Levy, president of ad sales and marketing for Turner
Entertainment.
The broadcast networks, meanwhile, are having a tougher time as
advertisers and agencies seem determined to hold the line after years
of high price increases.
Upfront sales leader NBC is expected to post flat sales of $2.9
billion, with lower-than-expected rate increases of about 7%. The
network sold only 78% of its time vs. 83% last year in hopes pricing
will be stronger during the so-called scatter market of short-term
sales closer to air time. Many packaged-goods advertisers are moving
money into the cheaper world of cable, says Randy Falco, president of
NBC Universal's Television Networks Group. "I blame it on the Atkins
diet," Falco says.
Fox also will be flat, with upfront sales of $1.6 billion and price
increases of 7% to 8%. "With people predicting our market will be
down a billion dollars, flat looks kind of good this year," says Jon
Nesvig, Fox's president of sales.
CBS is expected to post the best performance among the broadcasters,
boosting total volume by 8% and prices up to 10%. But CBS has sold
only 50% of its time because many advertisers are haggling over the
10% price increases that the Tiffany network is seeking.
Ditto for Walt Disney's struggling ABC, which is having problems
getting advertisers to cough up 5% price increases.
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