Cable crawls up 5% to $6.5B

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Cable TV's upfront market should finally wrap this week, with growth pegged at 3% to 5%-a sharp shift from last year's 15% to 17% gains. The market is expected to land at about $6.5 billion.

By one view cable is the bright spot in a weak upfront market in which broadcasters lost $100 million and syndication fell flat. But the performance is a disappointment for cable execs who had bullish expectations of raking in big bucks this year at the expense of broadcast.

"Cable continues to take a greater share, but out of a smaller pie," said Tim Spengler, exec VP-national broadcast, Initiative Media, part of Interpublic Group of Cos.

That begs the question of whether marketers' shift of money away from traditional media into new media options will curb cable's growth rate.

This year's market conditions certainly played a big role in moderating cable's growth. Friendlier-than-expected cost-per-thousand rate increases at the broadcast networks allowed agencies to reduce their reliance on cable by snaring more gross rating points while staying within their budgets. ABC's 5% CPM increases created a ceiling for cable's increases.

Two of the biggest marketers, Procter & Gamble Co. and General Motors Corp., moved dollars from prime time and cable TV to options such as broadband, video on demand and branded entertainment.

CRITICAL MASS

"Many marketers are cutting dollars from TV budgets and shifting them to non-TV entities," said Gail Stein, client-communications director at Omnicom Group's OMD. "Cable used to be the only place you could go for a laser-targeted buy. But now we know the Internet is at critical mass and broadband penetration has tipped."

TV executives are counting on money diverted from upfront deals to come back in the scatter market. "The only way cable will plateau is if there's a serious competitor toward which dollars move," said one cable sales head. "The other media aren't developed enough to make the scatter market anything but solid."

Said MTV Networks sales chief Larry Divney: "My mantra is `scatter matters."'

David Levy, president-entertainment sales and marketing at Time Warner's Turner Broadcasting, said cable's continues to outpace broadcast. "I still believe you'll see more dollars shift," Mr. Levy said.

Volume wasn't spread evenly among networks and the hardest hit were second-tier and digital networks, as well as those that rely more heavily on categories such as package goods, domestic autos and pharmaceuticals.

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