• by Paul Gough , February 10, 2003

As the Cabletelevision Advertising Bureau meets today for its annual conference in New York City, the industry’s immediate future depends on more than just cable.

It’s no secret that 2002 was pretty good for cable TV. The 2001-02 season was the first in history where pay-cable’s share beat broadcast TV overall, rising to 53% of total TV households compared to 25% a decade ago. Cable’s upfront and advertising revenues rose, and there were high-profile defections from broadcast to cable networks among advertising executives. The 500-channel universe becomes ever closer with 308 cable channels – many on the digital platform – in business or planned by the end of the year.

A report from the National Cable Telecommunications Association, the trade group for cable TV providers, suggests some positive factors for 2003. More channels continue to be announced, including today’s unveiling of MBC Network’s plans for a 24-hour news channel focused on the African-American community. And projections suggest cable may again break viewership levels this TV season.

Planners and buyers say there are signs that cable, like broadcast, are going to continue doing well. But a big piece of the equation remains missing.

“There are so many unknowns, between the economy and Iraq,” said Steve Kalb, VP of national broadcast at Mullen. But he said the national cable scene is healthy in general, though perhaps not as healthy as national broadcast has been.

Tim Spengler, EVP of national broadcast media at Initiative Media, said he sees the dollars being similar to last year’s despite the strong scatter market. He sees cable will grow as more advertisers’ money will follow the audience.

Broadcast had a phenomenal upfront last year, and the more hopeful think that might happen again this year. They’re bullish on cable, although it will take through the summer to see how it will play out. Buyers say there are still some deals to be had and niche networks in particular have been doing well in CPM, particularly in relation to the more mass-market cable channels.

Spengler sees the cable industry continuing to mirror print, with fewer general-appeal channels and more targeting specific segments of demographics or interest.

“We think the proliferation of channels will continue to cater to niche audiences and which will result in a less broad-appeal content and more niche targeting,” he said.

Spengler thinks that’s a benefit for planners and buyers, although it doesn’t make their work any easier. With more options to choose from, there’s more analysis and detail to do. He said purchasers are looking for more options than less to leverage price and availability.

Spengler doesn’t think there’ s been one network that has broken out with a string of hits and there isn’t one genre that has prevailed. Instead, he said, a number of cable networks have had one or two hits, like MTV’s The Osbournes, FX’s The Shield and TLC’s Trading Spaces.

“That’s interesting in itself. Each of them have found something that breaks trough but they are different properties that couldn’t be further apart … They cover the spectrum of programming genres,” he said.

Universal McCann’s Steve Ozzano said the difference between cable and broadcast isn’t as clear cut as it once was.

“There’s no simple answer. At the end of the day, it’s all about the individual brand and what the brand is trying to achieve,” he said. It depends on price, audience, environment and the underneath audience.

“The good news is that there’s a lot of programming out there, which means there’s a good diversity of programming environments,” said Ozzano.

Kalb said that planners need a number of cable networks to anywhere near the same kind of reach afforded by the broadcast networks’ major primetime shows. He said that while it’s true that cable networks have been making inroads into broadcasts’ overall primetime share but some of the ratings increases have been tied to cable fragmentation. General networks are losing ratings to niche networks, he said.