After the broadcast television networks performed surprisingly well in lining up advertisers for the coming 2002-03 season, media executives at the cable networks and syndicators worried that there might not be much marketing money left for them.
But, according to executives involved in the preseason negotiations, advertisers are spending more than expected on both cable networks like MTV and Comedy Central as well as on syndicated programming, which includes shows like "Entertainment Tonight" and reruns of "Friends."
These sectors of the television industry are expected to bring in at least $6.5 billion during what is known as the upfront market, a 14 percent lift from last year's miserable performance. That matches the showing by the broadcast networks, like CBS, NBC and WB, which improved their haul more than 14 percent, from $7 billion to about $8 billion.
The syndicators appear to be doing better than their cable counterparts. With the negotiations mostly completed, analysts estimate syndication sales will total $2 billion, up 17.6 percent from $1.7 billion in 2001-02.
Though sales will remain lower than those of two years ago, when a record $2.5 billion worth of ads were committed, "it's going in the right direction," said Gene DeWitt, president of the Syndicated Network Television Association in New York.
"Up 18 percent in this economy? We'll take it," he added. "It could have been $1.4 billion." The association's members, which include AOL Time Warner, the Tribune Company and Viacom, account for about two-thirds of syndicated billings.
Syndication appeared to benefit from the strong demand for commercial time in broadcast. "Some broadcast dollars flowed down to premium syndication as a replacement for those buyers who couldn't get all their money down in broadcast," said Andy Donchin, director for national broadcast at the Carat USA media agency in New York, part of the Carat division of the Aegis Group.
By premium, he meant programs with high or expected high ratings like first-run episodes of "The Oprah Winfrey Show" and reruns of series like "Everybody Loves Raymond," "Friends," "Seinfeld" and "Will and Grace."
The cable picture is more clouded as negotiations in that market are still going on. Most analysts are estimating that cable upfront sales will increase 12.5 percent to 15 percent, or to $4.5 billion or $4.6 billion from $4 billion. But the demand is not being spread evenly.
Analysts and media buyers said that so far there was more interest from advertisers in commercial time on specialized or niche cable networks with focused or themed programming like Comedy Central, the Food Network, HGTV and MTV. The networks with more broad or general programming, like TBS and TNT, are not faring as well. The few broad-based cable networks that are doing well, like Lifetime and USA, are getting their boost largely because they have cut the prices they charge for each 1,000 viewers.
"I don't think anybody believes cable will be back to where it was two years ago," when a record $4.8 billion was booked in the upfront market, said Jon Mandel, co-chief executive for United States operations at MediaCom in New York, owned by the Grey Global Group.
"The strong broadcast upfront didn't hurt cable," he added. Uncertainty remains, however, because much of the additional spending there came not from marketers increasing their ad budgets but from purchasing commerical time in advance rather than waiting until the season begins and buying in what is known as the scatter market.
Another challenge for cable is that the supply of commercial time is less scarce than at the broadcast networks.
"There's an abundance of inventory on cable," said Bob Flood, director for national broadcast at Optimedia International U.S. in New York, part of the Zenith Optimedia Group.
As a result, he added, "there's a level of uncertainty how robust the dollar volume will be in cable, especially as to whether dollars from broadcast will trickle down." Zenith Optimedia is owned by the Cordiant Communications Group and the Publicis Groupe.
Joe Mandese, editor of Media Buyer's Daily in New York, a newsletter published by Primedia, said: "Cable is showing more like normal growth, back where it should be, than closer to two years ago, which was an aberration.
"At this point, where only a third to a half of all cable upfront time is sold, it's hard to say what the total volume will be," he added. "But the strong broadcast upfront indicates that there is underlying demand in the marketplace."
At the Cabletelevision Advertising Bureau, optimism abounds.
"It's always a question of jockeying for position," said Joseph W. Ostrow, president and chief executive at the bureau in New York, "but all things considered, I think we are going to do very well, a far cry from last year."
"There are some really healthy categories driving spending," he added, "like automotive, pharmaceuticals, entertainment, toys and electronics, all of which are starting to build some strength in the retail market."
Stuart Elliott, The New York Times. June 14, 2002
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