News Articles

Cable Scatter Stays Strong

12/29/2002 07:00:00 PM Eastern

Santa has delivered enough goodies to little cable girls and boys to last through the first quarter, but what will the Easter Bunny bring?

Weak Christmas sales haven't yet hit cable network sales, which report that first quarter scatter pricing remains strong. Cable networks continue to enjoy spillover from broadcasters' fallen ratings. Ratings slips at Fox, ABC and UPN mean more inventory is allocated to make-goods, prompting advertisers to turn to cable for exposure.

The largest cable networks claim that scatter inventory continues to go for 15-20% more than upfront prices, though Jon Mandel, the co-CEO of buying giant Mediacom, contends they're exaggerating. Mandel says cable scatter prices are only 8-10% ahead (though that's still strong).

But the economy seems to be weakening. A Bank of Tokyo-Mitsubishi economist estimates that same-store holiday sales rose just 1.5% from last year, the smallest gain since the bank started tracking data in 1970. Wal-Mart last week acknowledged that its December sales will fall short of even its already modest expectations, and that giant discount retailer accounts for about a third of the Bank of Tokyo index, which tracks more than 80 retailers.

The upside is that basic cable finished the year beating broadcast nets for the first time, averaging 48% of the prime time audience versus 45% for the seven broadcast networks.

Perversely, that may drive broadcast pricing higher as advertisers pay an even steeper premium for the mass audience that they still can't get on cable. So broadcast CPMs go higher while cable's stay flat and the CPM gap widens a bit more.

September
October