Though still months away, the cable upfront market is already shaping up to be well up over last year, with the top networks increasingly positioning themselves as direct competitors to the broadcast networks in the audiences they can deliver.

And while there's some worry over talk of a recession, demand is expected to be strong for both broadcast and cable, based on what buyers and analysts are seeing in the scatter markets, where ad inventory not booked in the prior upfront is sold throughout the year.

“If you look at ad revenue, the cable networks have been very strong,” notes Derek Baine, associate research director at SNL Kagan. “At this juncture, everything looks strong for cable."

Cable ad spending was up 4.7 percent on a year-to-year basis in the first three quarters of 2007, compared to 0.2 percent for all media, according to TNS Media Intelligence.

In last year's upfront, the broadcast networks were up about 5 percent, to $9.3 billion according to Kagan, while cable was up almost 10 percent, to about $7 billion.

Cable is expected to do well in this upfront for a number of reasons. Key among these is surging advertising demand. Advertisers have been snapping up inventory on national TV outlets for months, even with the worries over a possible recession.

Demand has been so strong that some advertisers are paying as much as 40 percent over upfront prices on broadcast networks in the scatter market and only somewhat less for cable networks.

The cable upfront typically kicks off in late spring with the broadcast upfront and continues into the summer.

Cable should also do well because of a decreased supply of rating points on the broadcast networks, which are mostly suffering steep declines from last season.

Fewer broadcast rating points and increased demand will lead to higher prices, leading some advertisers to shift money to cable TV.

Ratings on the broadcast networks are down an average 9 percent from last season in the 18-49 demographic, most of which is due to the long-running trend where viewers are migrating to cable TV. Only a fraction of this ratings decline can be pinned on the now-ended writers’ strike.

The networks had a stockpile of originals to air during much of the strike and only recently ran out of episodes, forcing networks to air repeats of scripted hits.

“Some of the cable networks have been taking the opportunity of the writers’ strike to evolve into more competitive outlets versus the traditional broadcast networks,” says David Joyce, an analyst with Miller Tabak & Co. “Companies like Turner are now having upfront presentations the same week as the broadcast networks because they’re going after the general audience.”

Cable ratings are soaring. The vast majority of networks are up over last season, often by double-digit percentages, including some of the most-watched networks like USA, FX and Hallmark Channel.

But increased ratings, as always, will somewhat dampen expenditure increases on cable TV this upfront, says Larry Novenstern, executive vice president and joint managing director of newcast at Optimedia.

Cable has long had an oversupply of ratings points, which holds prices down to less than half the average charged by the broadcast networks.

Moreover, buyers often have the upper hand in negotiations because they have the luxury of picking and choosing between networks. Almost no network is a must-buy.

“If there is ratings erosion on network television it’s moving to cable, meaning there’s more supply against relatively constant demand,” says Novenstern.

One potential problem is a major recession. But media analysts say a recession would have to hit soon and hard to disrupt the upfront. Many advertisers are already putting together upfront budgets and media buyers and sellers have begun the preliminary stages of negotiations.

But it's still a concern. Says Kagan's Baine: “A recession isn’t factored in yet, but a lot could happen in a few months.”