Do big bucks for broadcast mean big bucks for cable in its own upfront?
“That’s the billion dollar question,” said Lynn Picard, Lifetime’s executive VP for ad sales. “I would assume that in order to keep pricing models in line, you would have to increase your cable relative to how you are increasing your broadcast.”
Turner Entertainment Ad Sales President Mark Lazarus is predicting a 10 percent rise to $4.5 billion for this year’s cable upfront. The Turner entertainment networks are themselves expected to take approximately a quarter of every dollar spent in the cable upfront.
Syndication could also end up a big beneficiary of the sudden tide of dollars surging into the television advertising marketplace. Syndicated Network Television Association President Gene DeWitt is predicting a 10 percent to 15 percent increase for syndication over last year’s disastrous upfront, when syndication fell 26 percent to $1.7 billion. That could put syndication over the $2 billion mark this year.
Somewhat surprisingly, the hot advertising action in this robust upfront is moving directly to the top tier of syndicated shows. For the most part, that will not affect the top-tier cable networks, including Lifetime and the Turner networks, but it does reverse the pecking order from last year, when syndication went third in the soft upfront. The reason for this year’s nascent syndication turnaround? Supply and demand: relatively limited inventory for the top-rated syndicated programs, which in some cases deliver a rating comparable to broadcast prime time, compared with the abundance of inventory in the proliferating, multinetwork cable world.
Which is to say that “Oprah,” “Live With Regis and Kelly,” “Wheel of Fortune,” “Jeopardy” and off-network runs of “Seinfeld,” “Friends” and “Everybody Loves Raymond” draw broadcast-sized ratings. They’ll sell out and be gone. In cable, hot off-network sitcoms can also be found at TBS and elsewhere, but for every must-buy “Osbournes,” there are dozens of cable shows that don’t crack the 1.0 rating threshold. And there is a plethora of new niche networks for target-minded advertisers.
The abrupt cancellation of last week’s monthly SNTA board meeting is one indication of the state of play in syndication’s upfront. SNTA members were “being swamped with requests for plans,” said Mr. DeWitt. So the SNTA board meeting was canceled, with one syndication seller saying, “Forget it, we’re going to make some money,” Mr. DeWitt said.
By the end of last week, most agencies were expected to have registered their budgets with syndicators.
Buyers moving right into syndication include Carat, Mediacom, MindShare and Optimedia. Sellers in negotiation (and in some cases already doing deals) include Columbia TriStar Domestic Television, King World Productions, Buena Vista Television, Paramount Domestic Television, Twentieth Television and Warner Bros. Domestic Television Distribution.
In addition to limited inventory, one reason some agencies are moving strongly into syndication, said one senior ad buyer, is that they waited too long to buy top-tier broadcast and ran into NBC’s “sold out” sign. However, some of the syndicators are “coming out too strongly,” the executive said. In fact, some of those syndicators were predicting mid-double-digit cost-per-thousand increases.
Like syndication, cable this year is turning into a two-tier marketplace, with the hot shows and time periods in demand and all the rest reduced to saying, “Please give me some money,” as one top-tier cable ad-sales executive said.
Universal Television, which consists of USA Network, the Sci-Fi Channel and emerging digital networks, is one big cable player that has already declared that it is willing to trade CPMs for dollar share. Jeff Lucas, Universal Television’s president of ad sales, recently told The Wall Street Journal he would be willing to go into a “negative area for the right amount of volume.”
That stance has drawn private criticism from Universal Television’s cable competitors, who say it risks dragging down cable’s overall upfront performance. Mr. Lucas was unavailable to comment on that criticism.