After trying to hold the line on pricing, Discovery Communications is slicing ad rates for its upfront inventory by more than 10%.
Dobb Bennett, president of Discovery's 49% owner Liberty Media, said that with the upfront market "sluggish, sloppy and not very attractive overall", the network group has seen a "low-teens decline" in the cost per thousand viewers it can charge.
However, total ad revenues should be flat because of strong audience delivery by Discovery Channel, TLC and Animal planet are up about the same percentage. Given the softness of the ad market, cable network executives have lowered their expectations for the all-important upfront market, but have not publicly detailed how bad the recession damage is.
Discovery CFO Greg Durig said that the programmer's sales force initially went into the market looking to keep CPMs constant from last year, but ad buyers rejected the plan. Rather than face the scatter market with tons of unsold inventory Discover executives decided "What we need to do is maximize revenue per viewer," Durig said.
- John M. Higgins
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