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as broadcast winds up
Bigger networks kick-start deals with discounts
By Elizabeth White
With the broadcast upfront close to being wrapped up, the upfront markets for cable and syndication ad time are beginning to pick up momentum, with the larger cable networks leading the way.
Lifetime, which finished first in the primetime cable rankings last week, confirms completion of two deals, one with The Media Edge and one as a part of an ABC Plus deal with Toys ‘R’ Us.
Four other top-10 networks, A&E, TBS, TNT and USA, are also said to have completed upfront deals in the past few days.
These early movers, however, don’t mean that the cable upfronts will reach a quick conclusion.
Media analysts still think that most of the deal-making will be done after the Fourth of July holiday, despite an earlier-than-expected start in the midst of the broadcast upfront.
"In general, cable expected some initial activity by July 4," says Bill Marchetti, an analyst with Paul Kagan Associates. "But the upfront should linger through July into August."
Analysts believe the key to kicking cable into high gear will be what finally broke open the broadcast upfront—pricing breaks.
"Like with broadcast, some networks are making price concessions in order to jump-start the market," says Marchetti. But unlike broadcast, where early discounts by NBC were quickly followed by rate cuts by ABC, Marchetti doesn't predict a wave of discounts to follow.
"Most cable networks should try to keep their unit price from last year," says Marchetti.
Cable is a cheaper buy than broadcast, something that typically keeps prices from falling as much. Also working in cable's favor is its continuing growth in audience share, which makes it increasingly attractive to advertisers.
Working against cable, however, is its ever-expanding inventory, which keeps prices from rising with its ratings.
"Coming in every year cable always has lower rates than broadcast. But obviously, an exasperating factor is that cable inventory rises every year. There are more avails and more networks this year," says Marchetti.
Analysts are predicting single-digit increases for cable in the upfront, while broadcast is expected to see declines in the range of 10 percent.
Unlike cable, syndication had a rough year during 2000-01, having declined 8 percent in gross rating points over the past year.
Most media folks expect the syndication upfront to be not only slow in starting but flat to down from last year’s $2.4 billion take.
"I know they’ve postponed syndication for a while, and they’re going slowly," says Deana Myers, an analyst at Paul Kagan Associates.
"They’re stalling, waiting to see what happens with broadcast. It’s late this year, but they want the broadcast market to finish up."
June 27, 2001 © 2001 Media Life
-Elizabeth White is a staff writer for Media Life.
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