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Cable Networks Turn Up Volume on Original Content at Upfronts

Mar 9, 2008  •  Post A Comment

As the broadcast networks try to recover from the Writers Guild of America strike, cable networks plan to be more aggressive during the upfront, selling more original content.
Last week, Turner Entertainment Networks announced plans to make its upfront pitch in the middle of the week when broadcasters traditionally put on their big presentations to ad buyers and their clients from all over the country.
Turner said it is stepping up original programming on TNT, TBS and truTV, and served notice that it was taking on the broadcast networks head on.
“Everyone in the industry realizes the broadcast business has been on a steep decline for years— this year in particular,” said Steve Koonin, president of Turner Entertainment Networks.
“For advertisers, our networks provide an alternative that is getting better and better.”
Turner is hardly alone among cable networks eyeing the upfront. After ringing up big price increases in the scatter market, other cable networks say they expect this year’s upfront to be strong.
Last year, the broadcasters drew more than $9 billion in upfront commitments, up 5% from 2006. Most big cable network groups reported double-digit increases in upfront commitments and larger price increases than broadcast. According to the Cabletelevision Advertising Bureau, cable networks took in about $7 billion in the upfront, up 6.5% to 7.5% from the prior year.
The broadcasters still enjoy a sizable lead in ad rates on a cost-per-thousand basis, but cable executives plan to be aggressive in pricing to try to close that gap.
“There’s more original programming on cable than ever,” said Jeff Lucas, executive VP for advertising at MTV Networks. “We’re bringing more value to the table.”
Mr. Lucas notes that cable programming also seems to extend well to the Internet, where there are extra opportunities to earn revenue. More advertisers are looking for multiplatform marketing programs, and cable networks have been doing that longer and with more enthusiasm than their broadcast counterparts.
Rich Goldfarb, senior VP of ad sales at National Geographic Channel, noted there are ongoing concerns about the business climate, but that ad spending cuts tend to lag changes in the overall economy.
The ad market itself has taken on a new dynamic, Mr. Goldfarb said. With broadcast networks’ ratings down even before the strike, there are fewer gross ratings points available for advertisers to buy, which tends to create a seller’s market.
“Supply and demand metrics have been clearly on the side of the vendors, and all reports and accounts are that that’s going to continue,” Mr. Goldfarb said.
But one cable ad sales exec warned that after seeing prices in the short-term scatter market spike by 30%, advertisers might make bigger-than-needed commitments in the long-term upfront market. That’s safe because they know they have an option not to buy as much as 50% of what they reserve at what should be favorable prices.
National Geographic Channel last week began making the rounds of ad buyers with its upfront presentation, which included new opportunities for sponsors to tie themselves to programming beyond TV, with broadband, on-demand, mobile, print and live-event elements.
Gospel Music Channel, which put on an upfront presentation at the House of Blues in Chicago last week, also stressed on-the-ground marketing opportunities to reach the legions of gospel music fans.
The network has upcoming events with Essence magazine and a big family-friendly tent at NASCAR events. It will have a presence at the giant Fourth of July Celebrate Freedom concert event in Dallas, as well as a new Labor Day event in Atlanta and an NFL-sanctioned Super Bowl Sunday special.
Elements of all of these events are available for sponsorship, said Brad Siegel, vice chairman of the Gospel Music Channel. During the last upfront, Mr. Siegel said, the network had barely 10 million subscribers. It expects to have 40 million by this year’s upfront. The added distribution has contributed to a four-fold increase in ad revenue, he said.
Major sponsors also have been attaching themselves to the Gospel Music Channel’s key programming. For example, Lincoln Mercury is sponsoring the third season of music competition show “Gospel Dreams.”
One new show being presented to advertisers is “Summer Road Tour,” in which a group of students are put on a bus that’s following the tour of a gospel music artist. The network expects the tour will produce 10 one-hour episodes in the fourth quarter. The series will have online extensions, including blogs from the tour bus. Another new program is “Gospel Playhouse,” a series of half-hour musical comedies, starting in 2009.
Gospel Music Channel also plans to launch prime-time show “Bobby Jones Next Generation” in May. Mr. Jones has a popular, long-running gospel show on BET.

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