Cable Upfront Set to Wrap Up 6% Higher Than '06

On Track to Book $6.9B as Buyers Look to Secure Q4 Spots

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NEW YORK (AdAge.com) -- The cable upfront is expected to be 80% to 90% wrapped up by day's end, with the marketplace predicted by several key executives to come in at $6.9 billion, up at least 6% from last year's $6.5 billion take. Syndication is also nearing an end, with executives reporting a 3% overall increase to $2.06 billion.
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This year's $9.1 billion broadcast upfront was up about 5% from last year's $8.95 billion. In total, the TV industry booked more than $18 billion in this year's upfront.

A surprising boost
TV spending overall experienced a surprising upswing in spite of what appeared to be significant challenges going into the negotiations -- an overall decline in live ratings, a currency change to commercial ratings and an increase in viewing from DVR-enabled homes.

Fourth-quarter scatter dollars, several cable network sales execs and key buyers confirm, were moved into this year's upfront as a direct result of the currency change to the commercial ratings plus three-days-time-shifted viewing metric introduced by Nielsen's new commercial ratings data. Media buyers were reluctant to risk having to pay for more expensive spots in the scatter market leading into the critical holiday sales season, executives said, preferring to secure time early.

As a result, the fourth-quarter scatter market will be especially pricey now that many networks have less inventory to offer. As one key broadcast sales executive said, "Fourth [quarter] is going to be tight."

David Levy, Turner entertainment's head of sales, said the strength of this year's upfront market could be chalked up to demand outweighing supply, due to a variety of circumstances. "There was a currency change, scatter dollars moved into the upfront marketplace, there's a political campaign and the Olympics next year. Budgets were up. All that played as a factor."

Old metric used by some
For both cable and syndication, the cost-per-thousand- viewers rates and predominance of the "C3" currency are in line with what the broadcast networks wrote last month. (Under the "C3" arrangement, TV channels agree to do deals based on commercial ratings, rather than ratings for programs, and the ratings include viewers who have watched as much as three days later through use of a digital video recorder.) But many cable networks did a handful of deals using program ratings rather than commercial ratings, as some marketers expressed a higher comfort level with the more traditional metric.

Others like Nickelodeon, Bravo and the Discovery networks signed up for Starcom's minute-by-minute ratings; the Publicis Groupe agency was the only one to offer the more granular data in this year's cable upfront.

As for CPMs, the Turner entertainment networks (TBS, TNT and the soon-to-rebranded CourtTV) reported increases in the 10%-11% range; the A&E networks posted low-to-mid-double-digit increases; Lifetime earned high single-digit increases; and Hallmark Channel finished with CPM increases as high as 15% to 20% due to increased fourth-quarter demand for its holiday movies.
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