• by Paul Gough , May 7, 2003

An industry veteran is advising clients to take advantage of the upfront but doesn't see merit in the networks' predictions of double-digit rate increases.

Mike Drexler, CEO of Optimedia International, said Wednesday he's telling clients that they should considering buying in the upfront because the economy is going to improve as the broadcasting season progresses and that prices will be higher in the scatter market.

But he said that today's uncertain economy, and the fact that a lot of clients' ad budgets haven't been set yet, are going to factor into this year's upfront. He said the news is mixed, with advertisers having money to spend and categories like movies/DVD, automotive, telecom and pharmaceuticals continuing to go strong.

"Clearly there's money out there and there are categories that are going to compete... There's a good indication that there's going to be a little more volume than last year," Drexler said.

But, he said, there's no indication on the broadcast side of any double-digit increases in volume. He said he isn't as optimistic as the broadcast networks, which have routinely predicted a double-digit volume increase. Drexler predicted that broadcast's volume in the upfront would be up between 5% and 7%. He said that cable volume would be higher than that, with a 10% to 12% increase in volume.

Drexler said that another factor to consider in this year's upfront is that the broadcast networks' ratings continue to decline. And cable has been increasing quality along with its share of viewing. He pointed to programming quality, with the cable networks moving more toward scripted and series scripted programming, not just specials and movies. "In programming quality, the [broadcast] networks don't have such a clear-cut advantage anymore," he said. Drexler said that the broadcast networks are focusing more on scripted programming but they're still going to use reality shows. With reality, some of the shows have been hits but others have not.

"Cable is just doing more about the marketplace than the networks," he said.

He predicts that syndication's volume increase will come in somewhere between broadcast and cable, perhaps up 8% to 9% over last year's. He said that there are some original breakout hits plus the staples of court and advice shows, along with Wheel of Fortune, Jeopardy and Oprah Winfrey, that perform and the off-network is also working for them.

He thinks that this year's upfront will probably be closer to normal than last year's. "The economy is not really strong enough to make an overwhelming runaway for the networks. So I venture to say that right now it looks more like an average year," Drexler said.