Cable Braces for Upfront Declines

Jun 26, 2006  •  Post A Comment

By late last week cable network executives were expecting lower revenue and smaller price increases in the upfront than they did a few weeks ago after watching the way buyers methodically handled the broadcast networks.

Cable sales executives said the budgets they were seeing from the agencies showed some small increases and sharp decreases, leading them to believe the market will be flat at about $7 billion rather than up 5 percent as been expected a month ago.

They also expect negotiations to grind out slowly, with some big networks done by July 4 and smaller ones not till August.

With the top-rated broadcasters getting very small gains in prices on a cost-per-thousand basis, a cable network executive said one agency would not even register budgets unless the network agreed to no increase.

With broadcast done, cable networks were getting budgets from ad buyers. Most budgets were in for such major groups as MTV Networks and Turner Broadcasting, while other big players were anywhere from 30 percent to 80 percent registered.

As with the broadcasters, cable executives said they thought advertisers were holding money out of the upfront to have more financial flexibility and to have funds for creative opportunities as the season goes on.

Ad sales executives said they hoped for small increases, but expected ad buyers to push for decreases.

“There’s no question, they’re going to be pushing,” one ad sales executive said. With the broadcasters getting very small increases, the buyers have already beaten their planning costs and don’t really need to push prices any more to impress clients. “They’re doing it because they can,” the sales executive said.