Cable Leaves Little On The Table, Major Nets Make Upfront Sales Goals

While a couple of broadcast networks are still holding out for more, the major cable networks that have led this year's upfront say they're largely done selling their 2004-05 ad inventory and that there's been a noticeable uptick in money moving from broadcast to cable.

Buyers agree there's been a further--and pronounced--shift toward cable and away from the broadcast networks, as advertisers have been willing to trade higher CPM increases at the networks for the opportunities presented by cable. Merrill Lynch analyst Jessica Reif Cohen predicted last week that cable's upfront haul could jump between 17 percent and 20 percent to $6.6 billion. That compares to Cohen's prediction for broadcast TV upfront spending, which she said would be down about 2 percent to $8.9 billion.

Along with the volume gains predicted, it's apparent that advertisers have rewarded a number of high-performing cable networks with CPM gains between the mid-single digits and double digits, depending on the network. MTV Networks, which has completed about 90 percent of its upfront selling, will have mid-to-high single-digit CPM increases on average and strong volume.

With about 80 percent of its upfront inventory sold, Turner Broadcasting reports high single-digit to low double-digit CPM increases across the board, with volume between 15 percent and 20 percent. And E! Entertainment Networks, which has sold most of what they want in the upfront, has substantial volume increases and CPMs in the high single digits.

"The volume has been quite extraordinary," said Mark Rosenthal, president and chief operating officer of MTV Networks. He credited MTV Networks' strong ratings performance, which has led it to ratings records in many of its channels.

"We're coming off a year where, creatively, we are the top of our game ... The networks are firing on all cylinders," he said Tuesday afternoon.

Turner Broadcasting took a chance in the upfront when it rebranded TBS as a youth-oriented comedy channel and its high-profile acquisition of "Sex and the City," an HBO original series that will make its first commercial TV run on TBS this month. But Turner President of Entertainment Sales David Levy said it's paid off with a number of big deals, including the previously announced "Sex and the City" sponsorship by Mitsubishi.

Levy said TBS' performance in the upfront means that the advertisers are giving a vote of confidence to the rebranding, and expect "Sex and the City" to do well on TBS, where it will be edited for taste.

"They've really embraced it [the rebranding]. We had a tremendous upfront from the programming perspective too," Levy said. "People also know that it's a virtual original, and a pop culture phenomenon that is going to do a big number."

David Cassaro, senior executive vice president of sales at E! Entertainment Networks, said that there was strong demand for E!--and particularly the lifestyle programming that its sister network, Style, has been offering.

"It's a hot space right now," he said.

And cable executives see the 2004-05 upfront as a watershed year in the battle for parity with the broadcast networks. MTV Networks' Rosenthal said that when all is said and done, it's clear that there will be a sizable move of money from broadcast to cable. Other cable executives agree.

"Is it a half billion, three quarters of a billion, one billion? I don't think anybody knows yet," said Cassaro. "But it's clearly going to be toward the higher end--in the neighborhood of a billion, in my opinion."

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