With the upfront rolling ahead at full speed in most quarters, sales executives at some second-tier cable networks are sweating over the kind of price increases they will be able to get from buyers.
Top-tier cable networks, like those owned by NBC Universal and Turner Broadcasting, achieved increases of 7% to 9% in deals that began getting done two weeks ago.
But once those networks finished, things started getting tough for the smaller fry, with some accepting deals with price increases in the 3% to 4% range.
One cable ad-sales executive said he was getting good volume from clients, but “the pricing power wasn’t there.”
“Some of the small cable networks are going to be quite agreeable about bringing in money,” said Aaron Cohen, executive VP and director of broadcast at Horizon Media.
An executive at another network with a more focused audience said the network was getting big enough budgets that they could afford to turn away business and only take money from clients willing to pay an acceptable increase. But at the end of last week, that network had only completed about 20% of its deals.
Based on the sales some of the major cable network groups are ringing up, the cable upfront is expected to rise about 10% from last year’s $7.68 billion. Much of the increase is moving over from scatter because prices there skyrocketed above upfront levels in the fourth and first quarter of the current broadcast year. Some money is also spilling over from broadcast because audience erosion has limited the amount of rating points available there.
Syndicators also said they were seeing a strong market, with some of the companies reportedly being done with their deals earlier than usual. Sales there were also reportedly up close to 10%, with price increases ranging from 2% to 9% depending on the program and its time slot. Last year, the syndicators took in about $3.1 billion during the upfront.
The jump in syndication sales is either a sign of the overall strength of the market or a signal that syndication’s pitch that it offers stable programming, solid ratings and live viewing is finally sinking in after a couple of flat seasons.
“The advertisers are looking at what we have to sell and it was a pretty good value,” said Bob Cesa, executive VP at Twentieth Television. “People were realistic on both sides of the desk.”
He said the market showed strong demand for shows in daytime, including his company’s “Morning Show With Julie and Mike,” court shows and game shows. There was also demand for its young- and male-skewing off-net comedies, such as “Family Guy.”
“I do think there’s a combination of a lot of things” at work making the syndication upfront market strong, said Bo Argentino, senior VP for advertiser sales at NBC Universal Domestic Television Distribution. The new commercial ratings system being used for buying and selling ads helped the syndicators, Ms. Argentino said.
With the broadcast market showing some limits, syndication is also proving a safe haven for advertisers.
“There are a lot of attributes to syndication that become very clear when buyers don’t necessarily want to put all their money into a new area like digital, but they need to diversify,” she said.
Ms. Argentino said the NBC’s new offerings, including a syndicated version of “Deal or No Deal” were well received in the market, as were as the off-net launches of “House” and “Monk.”
The cable news networks also got into the upfront game early last week, with CNN, Fox News Channel and MSNBC registering sales last week, according to sources. None of the networks would comment on ongoing negotiations.