Upfront wraps: Cable hits $6 billion, steals from broadcast

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As the cable upfront enters what could be its final week, buyers and sellers are estimating that the sector will reap an additional $800 million this year, which would bring the total haul to $6 billion, up from $5.2 billion at last year's upfront. Overall, the market was estimated to be up anywhere between 15% to 17%.

About half the extra revenue is coming out of broadcast, while the rest is simply increased ad budgets for cable, said those involved in the deals.

One thing's certain: Cable money wasn't spread around evenly. Top-tier services made all the gains this year, with Turner Entertainment Group's TBS and TNT, NBC Universal's USA and Discovery Communications' Discovery the most frequently cited recipients of extra cash.

"We did do high-single-, low-double digit [cost per thousand] growth and saw 20%-plus revenue growth," said David Levy, president-entertainment ad sales at Turner Broadcasting. He believes there was a definite swing of money away from broadcast networks.

A&E Networks, which owns A&E, The History Channel and Biography, saw volume increases of between 17% to 20%. Mel Berning, A&E's exec VP-advertising sales, said digital channel Biography took mid-single-digit CPM increases, while the others were mid-to-high single-digit increases. While the network isn't finished its sales, Mr. Berning said the travel category was strong, with financial, fast food and electronics also solid.

Discovery Networks made CPM gains of between 9% and 11%, according to market estimates. Those gains are for all channels, which include TLC, Discovery and smaller services such as Discovery Wings, Discovery Kids and Fit TV. Volume was reported to be up 25%. According to one buyer, money is still being placed with second-tier services such as Oxygen, E! Entertainment and National Geographic Channel.

bad news

One high-level media buyer noted news channels, such as CNN and Fox News, were not closing deals as fast as they would like. Fox News would not comment. CNN representatives said revenue was up 30%. New categories spending with news channels include movies, retailers and beverages. Sports networks are also still in the midst of negotiations with Walt Disney Co.'s ESPN taking a particularly bullish stance with buyers.

Sean Cunningham, president-CEO, Cabletelevision Advertising Bureau said, "Agencies have told me throughout the year that cable continues to work hard on building business beyond the 30-second ad and we have heard that consistently."

digital networks

Buyers estimate that digital channels are getting anywhere between $50 million to $100 million of the total cable upfront. According to people familiar with digital network ad sales, costs range from $50,000 for a 52-week schedule on a channel that has distribution of 5 million to 10 million homes, or between $100,000 to $300,000 for channels that are distributed to 20 million homes or more.

Digital networks such as Discovery Times, a joint venture documentary-oriented channel backed by Discovery Networks and The New York Times, is another that's gained some attraction along with sibling Discovery Home.

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