• by July 9, 2001

Cable channels will start selling the bulk of their 2001/02 ad slots this week, and advertising agencies are already insisting on big discounts.

Now that the broadcast networks have wrapped up the bulk of their "upfront" sales, pocketing less than $7 billion compared to roughly $8 billion a year ago, the ad agencies have started asking cable networks to submit their budgets for the 2001-02 season.

A few major ad agencies such as Young & Rubicam's Media Edge and Leo Burnett's Starcom, and advertisers like Chrysler, have begun buying time on cable, picking up bargains of, in some cases, 20% off the prices of last year's upfront.

The just-issued second-quarter Nielsen primetime ratings have reinforced the gloom in cableland, as only two of the 10 top-rated cable networks -- Lifetime and TNN: The National Network -- improved on their performance during the second quarter of 2000. And even Lifetime and TNN may have a hard time securing increases in ad rates given the falloff in advertiser demand for spots in 2001-02.

Most economists are predicting continued sluggishness in the overall U.S. economy for the foreseeable future, leaving cable networks resigned to a disappointing upfront.

- Reuters/Variety