Upfront could hit $5 bil for booming cable nets

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Stealing some thunder from this week's broadcast networks upfront program presentations, a handful of cable networks last week made pre-emptive strikes to ink ad deals.

Turner Broadcasting System, Lifetime Television, MTV Networks and Discovery Networks sold from 15% to 40% of their overall inventories at mid-double-digit price increases. In previous years, only Turner put together a significant number of pre-broadcast upfront deals.

Cable network executives predict the total cable upfront for the 2000-2001 season could rise to as much as $5 billion this year, up from the $3.8 billion of a year ago. Turner controls 23% of all cable ad revenues, according to cable ad executives, the largest share of any cable group.

Turner executives cite the still bullish economy as the reason it quickly sold 39% to 48% of all its inventory. By the end of the week, Turner said it was near its goal of selling 55% to 60% of its entire inventory on TBS and TNT.


But some media agency executives doubt Turner performed that well given that, at press time, only Starcom Media Services, Chicago, and MediaCom, New York, had done deals.

Turner's upfront selling goal is higher than last year's 45% to 50% mark. But its executives said this year's early deals took less time to close.

"We have done in days what it took two and a half to three weeks to do last year, and a month to do a year before that," crowed Liz Janneman, exec VP, Turner Entertainment Sales.

And she said clients' budgets at Turner's networks are 20% to 50% higher than last year.

Lifetime closed almost 50% of its upfront sales target. Lifetime has gained ground since the network moved up to second place in total-day household ratings (a Nielsen Media Research 1.1); and second place in prime-time numbers (a 1.8).

"From the money I'm seeing, cable will be up 25% to 30%, but we are outpacing that," said Lynn Picard, exec VP-advertising sales, Lifetime.


Bill McGowan, exec VP-advertising sales for Discovery Networks USA, said his networks also inked some early agreements, adding he believes the cable market will move in two waves--before and after the broadcast upfront.

"For an advertiser, it could mean giving us $10 million now, and then another $10 million later," he said at last week's National Cable Television Association meeting in New Orleans.

Still, many advertising agency executives were talking--but not sealing--deals as yet.

"I wouldn't say the cable upfront market has broken open," said Gary Carr, senior VP-managing director of national programming for Initiative Media North America, New York. "There are some talks going on with a couple of networks."

Several agency executives said cable networks are attempting to feed off an expectedly strong broadcast network upfront due to start this week after the network programming presentations.

"The cable networks are trying to leverage off the broadcast upfront paranoia," said Erwin Ephron, a partner at consultancy Ephron Papazian Ephron.

But why are agencies moving now? "You have to do something for your client in a wake of a possible strong market," said one media agency executive. "So you, hopefully, do some early deals at cheap prices."


Cable wasn't the only TV market to strike last week. Spanish-language network Telemundo also started to post early ad pacts.

That market could rise steeply this year, to as much as $775 million, up 36% from what the networks grabbed last year, according to Steve Levin, exec VP at Telemundo. He added that Telemundo inked about 10% of its projected upfront sales target at mid- to high- double-digit price increases.

Telemundo seeks 110 upfront advertisers this year, a 47% gain over last year.

Telemundo expects to significantly gain on market leader Univision this year, since its total-day audience share of the adult 18-to-49 audience rose to a 21 from a 14 during the 1999-2000 season. Mr. Levin's network pulled 22% of the advertising revenue last year, with Univision controlling 78%. This year, Mr. Levin believes Telemundo should close the gap even more.

Copyright May 2000, Crain Communications Inc.

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