New York -- Cable's 1999-2000 upfront-sales surge --
which could range from $200 million to $1 billion by various estimates -- won't come
without a stiff fight against the broadcasters, and the battle will be over pricing.
TV networks and syndicators intend to be aggressive with
their own pricing, E! Entertainment Television executive vice president David Cassaro
said.
But basic-cable networks should enjoy overall
cost-per-thousand-homes (CPM) price increases "in double-digits, in the
mid-teens," Discovery Networks U.S. senior vice president of ad sales Bill McGowan
said.
That would be up from single-digit increases in recent
upfront selling seasons.
Joe Mandese, senior vice president at Myers Consulting
Group, said emerging networks -- as well as upscale networks like A&E Network,
Discovery Channel, Cable News Network and ESPN -- should find it easier to notch CPM
increases this year.
Last year, when cable's upfront hit $2.8 billion, some
cable networks managed double-digit increases. But they were the exception.
Discovery Channel and A&E, for example, were virtually
alone on the high end of the CPM-increase spectrum, with hikes estimated in the
neighborhood of 10 percent to 11 percent.
At that time, agencies held the "Big Three" TV
networks' CPM hikes in the 2 percent to 7 percent range, with only Fox (9 percent)
and The WB Television Network (high teens, from a low base) able to command more.
Two years ago, cable's overall CPM hikes were kept at
4 percent to 9 percent, with general-interest networks on the low end of that spectrum and
targeted networks on the high end.
This year, Mandese said, "the broadcast networks are
alluding to double-digit increases." Cassaro expected all but ABC to aggressively
seek high CPMs, with The WB eyeing the high end, at 20 percent.
Paul Schulman, president of Schulman/Advanswers, said the
networks would be hard-pressed to get much higher CPMs than last year. Only The WB's
ratings are up, and other networks' poor Nielsen Media Research ratings numbers have
forced them to put aside more inventory to pay off previous upfront commitments, he added.
If the broadcast networks do force through hefty CPM
increases despite their ratings slippage, some clients might shift more dollars into
cable, Mandese said. Cable networks command lower rates and CPMs than broadcasters -- a
situation that most buyers don't see changing anytime soon.
Meanwhile, some ad-agency executives questioned how
networks could make sales projections when buyers have yet to get clients' ad-budget
approvals. And some executives expressed doubt about highly touted categories.
For example, A&E Television Networks' senior vice
president of national sales, Arlene Manos, questioned talk of a pharmaceutical-ad boom,
pointing out, "We were looking for that last year, but it didn't quite
materialize."
Elsewhere, Kraft Foods Inc. is talking to various cable
networks about buying two-minute commercial pods, which it would then divide into five
24-second units.
Some cable executives said Kraft -- amid recent concern
over advertising clutter -- has done proprietary research indicating that 24-second spots
may register somewhat lower recall levels than 30-second spots, but they may still be more
effective than 15-second ads.
