Cable Upfront Seeing Record Volume

Money flowing to smaller networks
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After a strong broadcast upfront, the cable market is booming, particularly when it comes to volume.

Market sources estimate that the cable will be at least 15% higher than last year, bringing the total volume of advertising commitments to $9.4 billion, a record that would also eclipse the size of the broadcast total for the first time. Some large cable groups had volume increases in the 20% to 25% range.

Prices increases  varies from network to network, but ranged from high single digit gain on a cost-per-thousand viewers (CPM) basis, or just below the lowest broadcast hikes, to increase in the high teens, on par with the best the broadcasters could manage.

Cable sales executives said the amount of money they were getting from agencies increased as the week went on, strengthening the market as it went along. They said they thought that some of the added money might have come from broadcast, where the networks were aggressive about getting price increases in the double digit range. There was also money shifting among the cable groups as some insisted on robust increase in their rates.

The big groups also attempted to move advertisers from their biggest networks to ones that are still emerging. It is easier for buyers to swallow big increases on smaller networks because their CPMs are usually still lower than the bigger channel, lowering their average cost per viewer.

Turner Broadcasting moved early doing deals with most of the major agencies at 12% to 13%. In addition to getting increases, Turner managed to raise prices for its reality channel truTV to levels similar to those for its more established TNT and TBS, sources said.

Similarly, NBCUniversal's cable group, which now includes networks that were part of Comcast before Comcast acquired a 51% interest in NBCU in January, was diverting money advertisers with low base rates were looking to spend on USA Network. Buyers said. NBCU often was able to steer that money to other channels in its portfolio. That would help USA raises its average CPM while helping the entire group meet its revenue goals.

Discovery Networks was looking to funnel the high volume it was seeing into Investigation Discovery, which has seen a huge increase in viewership since the last upfront. Sponsors were also being encouraged to put money into Science, Military Channel and the new Velocity. Discovery looking to get advertisers into OWN, its joint venture with Oprah Winfrey. Because it has large multi-year commitments from major advertisers and its viewership fell short of expectations, there were few ratings points available for sale.

The high volume was also said to be helping A+E Networks, which has a big winner in History and a turnaround situation in Lifetime that are balancing each other out.

Buyers said that some of MTV Networks channels -such as Vh1 and Spike-we getting rates on the low end of the range, while its Comedy Central was achieving double digit gains. MTV's rates were hampered because spending by clients looking to reach younger viewers did not appear to be rising as fast as other categories.

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