Cable Upfront Moving Ahead
The large gain over last year will be heralded as further evidence of economic recovery. It will be great for the networks, but less so for buyers who won't be able to get the deals they seek. "They'll have to bite the bullet and pay the increases," says Jack Myers, editor of the Jack Myers Report. He says many networks are raising their prices, although a few have dropped them. Myers says there is currently a "standoff between buyers and sellers, with buyers wanting a negative CPM and sellers believing the market is too strong to reduce the CPM, so they're holding back." The result is that "deals are being made slowly and selectively," although he still predicts the cable upfront will be concluded by July 4, earlier than last year.
Joe Mandese, editor of Media Buyers Daily says one third to one half the dollar volume has already been sold. "Estimates are it will be bigger than expected with some modest growth," he says. But major networks like USA and Lifetime dropped prices, which is making it harder for the others to uphold their rates. "Some networks are holding out for CPM increases, which slowed the market down," he says. "It's no giant sellout like broadcast."
He also says niche networks are doing well because "they're coming off a low base and they have advertisers that have to be there." The Food Network, HGTV and other niche networks "will grow in volume and price," he says.
Mandese says Turner Networks is in a bind, trying to raise its rates amidst the cuts. But a Turner spokesman told MediaDailyNews that things are going well. "We're about 70 to 75 percent done with the deals we're going to do," he says. "Our lineups for TNT and TBS are attracting a mix of both new and returning business. Volume is up as is pricing, slightly."
Perhaps the word slightly is indicative of the state of the cable upfront, which is moving ahead at a moderate pace. It's bouncing back from last year's deficits with a stronger showing this year, although maybe not as strong as broadcast. But the success of the broadcast hasn't hindered cable--there's enough money to go around for both. When the dust settles after the negotiations are finished, "much of the base that eroded during the advertising recession will be restored," Myers says.