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Cable Upfront Looks Stronger Than Broadcast

The cable upfront, which was not finished but heading to conclusion Friday, looks to be a bit stronger than the healthy broadcast market that already wrapped.

Cable ad deals are on track to be 10% above last year’s nearly $8 billion upfront volume, while the average CPM increase for cable looks to be somewhere in the 6-9% range, sources say. With over 70 national basic cable networks, volume and CPM rates for individual networks vary widely from the industry average.

The broadcast upfront wrapped early June, with dollar volume up just 1% to $9.2 billion though CPMs increased in the same healthy range as cable.

“Demand in the upfront was stronger than was expected in cable,” Debbie Richman, EVP of Ad Sales, Lifetime Networks. The women’s media outfit, whose flagship channel is on a ratings win streak with originals like Army Wives, booked an above-average 9-10% hikes in CPM and double-digit volume growth in the upfront.

Leading up to the upfront, Wall Street predicted dollar volume would be flat to down, and CPM increases in the mid single digits—which proved too pessimistic. Those downbeat forecasts were based on a weak economy and some troubled TV ad categories such as domestic automotive.

The downbeat estimates overlooked a strong scatter market and also pockets of strength in financial services, movies and consumer electronics ad categories.

This year’s upfront sailed along without controversy, such as last year’s battle over counting DVR viewing, which resulted in an industry standard of adding three-days of delayed viewing to the live audience for the now-accepted C3 metric.

“Every year, there is a lot of hemming and hawing about the need for changing the dynamics of the upfront and we should take our time negotiating,” says Carrie Drinkwater, SVP group account director at media buyer MPG. “In hindsight, we really didn’t see that. The (ad) money was there. You don’t see a lot of protesting.”

Upfront ad buys are firm only for the fourth quarter, with some options to cancel thereafter. It remains to be seen if any upfront money is pulled off the table later, but options rights are said to be no more than in past years.

The Hollywood writers strike, which ended in February, hurt TV ratings by cutting sharply into first-run scripted TV shows, which had the perverse effect of tightening ad inventories due to make-good ads, sources say.

Also, there is some speculation that ad money for the scatter market was pulled forward into the upfront, which could depress scatter when the season started. Others sources discount that theory. In the current season, scatter was surprising strong at rates 10-40% higher than last year’s upfront rates, which gave advertisers a reason not to hold back this year.

For complete coverage of the upfronts, click here.