CABLE ABLE TO CASH IN

BY SHIRLEY BRADY It was fast and frenzied, but by Friday advertisers had committed to spending at least $9 billion for the 2003-’04 broadcast prime-time season — with estimates ranging from $9.2 billion on the low end to $9.8 billion by those who included prime-time sports and Academy Awards ads sold by ABC. Broadcast network deals last week were reportedly inked at rates up to 25% higher than last year. The week’s tally far outstripped anyone’s expectations going into the upfront, even surprising self-proclaimed bull and veteran media-watcher Jack Myers, who headlined his upfront report on Friday: “Wow!!!” Marketers’ urgency to lock in fourth quarter and 2004 schedules also gave an unexpected boost to cable, with concurrent deals being written for top-tier cable networks last week, instead of after broadcast and syndication deals were locked in. Ad sales chiefs at USA, Turner and Discovery confirmed they had inked deals by Friday — as did Lifetime, which was being watched closely given its recent ratings slide. Fox Cable, including FX, saw double-digit increases for the deals it struck last week, with its cable properties pacing 50% to 60% over last year’s upfront. MTV struck and continued to work on deals last week, according to spokesperson Jeanine Smart. “We are closing select deals with major agencies,” she said on Friday. “We are seeing substantial growth across all of our properties, and our CPMs are in double digits.” The action now moves to the rest of cable this week, with ongoing discussions expected to turn into contracts at Court TV, E! Networks, Hallmark Channel, Game Show Network and cable networks owned by Scripps, Rainbow and Viacom, according to ad sales executives at those networks. A&E, whose executives were not available for comment on Friday, will be closely watched this week, with no deals from last week to build momentum for this week’s cable-oriented phase of the upfront. Although cable network ad sales is a year-round business, the broadcast upfront was particularly favorable for USA, Turner and Discovery, which all inked more than half of their deals by press time and expect to continue closing deals this week. Lifetime EVP of ad sales Lynn Picard — who was pitching a second night of original programming on weekends and product placement opportunities on new shows such as Merge — was playing the upfront close to her vest on Friday. She declined to give percentages, although confirmed she wrote business last week and expected to start the holiday weekend with a substantial amount of her upfront deals done. “We are writing business and moving along at a fast pace,” Picard said on Friday. “We are right on strategy with what we wanted to accomplish, so I’m very pleased. The money’s definitely there, and the top tier of cable networks is really active. I think that’s how the future is, with tiers. Advertisers and agencies are recognizing there is a lot of value in some of the top-tier programming, such as our original stuff and Turner’s and USA’s originals and big theatricals, so it probably makes sense that they wanted to secure that kind of programming. I don’t know if they’re positioning it back to the clients that it’s like broadcast, but that could very well be.” If agencies are positioning top-tier cable nets as comparable value to broadcast in terms of efficiency and reach, that’s in no small part due to Turner’s Millennium III report that made the pre-upfront rounds at the agencies. “With the agencies looking at cable concurrently with the broadcast upfront, it suggests to me that the message we were going out with for the last month and a half concerning Millennium III and the substitutability between us and broadcast really paid off,” said David Levy, president of Turner Entertainment Sales and Marketing. Last week’s early big-ticket cable deals are “going to set the market, when it’s all said and done,” he added. With more than half of available time on TNT and TBS sold by Friday, Levy added that major categories — including pharmaceutical, automotive, movies, home entertainment and particularly DVDs — were up by at least 10%, with all 2002 sponsorships now renewed, along with special promotions. “Volume is up across multiple categories, at least 10% and in many cases a lot more,” he said. “I thought there might be one or two, but there have been multiple categories that have increases, which makes sense with a $9 billion-plus upfront.” USA was on track to sell more than two-thirds of its upfront inventory by the weekend. “We’ve created more value for this upfront with hosted nights on Thursdays, which we’ve never done before on USA, and a hosted Saturday afternoon movie,” said Jeff Lucas, president of ad sales at Universal Television Group. “We do deals that include cross-platform product placement in our theme parks. At Universal, we produce many of the TV shows that air on the networks, and we work with the producers of those shows.” Lucas attributed the buzz for USA and Sci Fi last week, which are sold in a package with sister network Trio, to better-than-ever original programming at both networks. “On the Sci Fi side we put on Taken, which averaged a 4.1 over ten nights — that’s not cume, it’s average, which is amazing from a network that when we sold the [2002] upfront and sold Taken, was doing a .6,” Lucas said. “At USA, we put on Dead Zone, which was the highest premiere in basic cable ever, and we put on Monk, which was the highest-rated drama in its first season, higher than [FX’s] The Shield, and was then repurposed by ABC. So we fulfilled our promise, we put on quality programming. People took a gamble, they went with us, they had a good year and we had a great year. Now this upfront’s here and we’re selling what we put on the air last year and what we’re putting more on the air of this year, which is quality, original programming.” USA has just aired its final Eco-Challenge, a sports franchise from Survivor producer Mark Burnett that was a magnet for product placement. But Lucas said a new show conceived by Universal Studio’s in-house production arm Reveille, run by former William Morris agent Ben Silverman, generated heavy buzz among buyers last week interested in product-placement opportunities on USA. Lucas has been pitching advertisers interested in the hot home makeover challenge category with Silverman’s concept Dream House (working title). “It involves four houses on a cul-de-sac, and four families compete room by room to overcome different challenges in order to put each room together, and it will run over an eight to ten week period,” Lucas commented late last week. “They get judged by experts on-site, and the winner gets to keep the house. So if you win a certain challenge Home Depot comes in and does the next room for you while you sit in the hot tub, and all the other families get pissed off. Ben only came up with this two weeks ago, so we weren’t able to present it before the upfront, but we’re now close to signing Home Depot.” Discovery Networks ad sales president Joe Abruzzese, who last year joined Discovery from CBS, was also surprised by the size of last week’s broadcast upfront. “I didn’t realize that the network business would get that far sold out, and now they’re even more sold out than they were last year, which is pretty incredible,” the ad sales veteran commented on Friday. “A lot of it appears to be scatter money moving forward, some of it’s organic growth, and some of it’s speculation. With that said, the growth that I’m seeing in the cable budgets is outpacing the network budgets. What we’re seeing in the cable budgets are anywhere from 30% to 40% more dollars, whereas the network piece is probably 10% up, which is still incredible. So it looks like cable is still getting more volume increase. I think maybe only a few [cable] networks will come close to the broadcast network CPM increases, but cable doesn’t need to because our ratings are going up.” Having gone from pitching a handful of shows on CBS in a two-hour upfront to pitching shows across 13 Discovery networks, including BBC America, Abruzzese has been busy preaching the value of cable to the buying community. “People watch cable networks, but on [broadcast] networks, they watch shows,” he said. “They watch Animal Planet or TLC or Discovery, and typically watch the whole schedule. On networks they’ll watch Everybody Loves Raymond, then they switch to Law and Order, then they watch 60 Minutes, or they watch West Wing. But we have to prove that association is better with advertisers than just watching shows.” But with double-digit CPM increases at TLC, where the growing Trading Spaces franchise continues to be the category leader for makeover shows, and across his other networks, Abruzzese observed that preaching cable’s virtues in the walkup to last week was like “hand-to-hand combat. Every single day you go through this with a client: You tell them what’s good about cable and ask, ‘Why are you spending so much money on broadcast? Why are you paying those ridiculous increases?’ All the stuff I used to say, I’m saying in reverse now, but it’s actually just a different point of view.” Abruzzese added that it’s too early to predict what the impact of last week’s upfront bonanza would be on the scatter market. “What happens when the economy turns around and new money shows up, and the networks are 98% sold out? Cable is the next-best alternative, in some cases a better alternative, and it’s certainly more efficient. Then our volume goes up again. So I’m very happy where we are right now.”