Cable upfront volume up, but CPMs aren't


Despite weak pricing, it is becoming clear that cable networks would rather sell more ad time upfront than bet on stronger demand in the scatter market.

Cable channels have shifted perhaps 10% more of their inventory into preseason sales, helping increase total sales volume, which sources say may boost cable's upfront sales volume as much as $4.8 billion.

That would be 20% over last year's horrid ad market and match basic cable's take in 2000-01. Analysts are sticking with estimates of a 10% jump.

"CPMs are flat, ratings guarantees are up 5%. You shift 5% or so in inventory from scatter to upfront, you get to 10%," said Sanford Bernstein & Co. media analyst Tom Wolzien.

Cable's viewership gains are paving the way, according to Discovery Networks ad sales chief Bill McGowan. "The dollars chase the audience." His Discovery nets increased upfront inventory, although he declined to say how much. In March, McGowan predicted volume would increase 12.5%, but now he expects a more robust 15%-20%.

Cable networks could see gains again in scatter. "History will say one or two nets will have a ratings fall-off and tighten scatter even more for broadcast," said Mark Lazarus, president of Turner Network Sales.

But it may be safer to write the business now. Having sold out only 40% upfront last year, USA significantly increased its preseason sales (though at 10% to 12% discounts). Turner sold a little more time upfront, and Lifetime sales chief Lynn Picard said she put 80% of her upfront, vs. around 70% last year. One industry executive said Lifetime's CPM pricing is down about 5%.