The Perfect Storm

April 7, 2008

Last year, the broadcast upfront, at $9 billion, was flat. Cable's $7 billion take was up slightly, single digits. This year, that needle will definitely move, say many cable sales execs, because of a "perfect storm" of events: the writers' strike, a lackluster broadcast programming year, real ratings growth for many cable shows, C3 ratings, and, finally, high scatter prices in the third and fourth quarter driving buyers to book early rather than wait.

            Michael Brochstein, senior vp of sales for young-adult–skewing Fx (home of Emmy- and Golden Globe–winning shows Rescue Me, Nip/Tuck and The Shield), calls the 2008 cable upfront a "watershed."

            "When you look at networks like Turner, Discovery, MTV, Fx, and others, cable is stronger than it's ever been," Brochstein asserts. "Coming out of last May's upfront, broadcast really had no hits, while, along with the writers' strike, cable made impressive gains. A lot of cable networks are swinging on the upswing."

            While everyone agrees it's too early to tell, cable networks are already getting called upon way ahead of previous years. Rich Goldfarb, senior vp/media sales, National Geographic Channel, says two major agencies have already approached National Geo about doing some early deals. Predicting double digit gains for cable in this upfront, he says, "Some might look askance at our bullish point of view, but all the indicators- weak broadcast ratings, the strike, scatter market prices up 30 to 40 percent- are in cable's favor.

            For David Levy, president of sales for Turner Broadcasting and president of Turner Sports, it's all about brand. "Strong media brands will win out no matter what the distribution or platform," he contends. He's also quick to say that while broadcasters get attention for top level, high-rated shows like Grey's Anatomy and American Idol, "buzz for a few select shows doesn't equal success or value for advertising clients. Cable programming like TNT's The Closer, USA's Monk and ESPN's Monday Night Football are very competitive with broadcast." (The Closer, starring Kyra Sedgwick, averaged 8.1 million viewers in its third season.)

            Levy shies away from predictions, however. "We don't control the market; the market controls itself," he says sagely. But, citing the indicators already mentioned, he notes that network broadcast was down 17 percent among 18-49-year olds in 2007. "There are just less GRPs."

            Turner is so confident about its ability to take broadcast head-on that it has scheduled its upfront presentations in the same week the four broadcast networks present theirs. On May 14, the company will announce that a majority of its weekday and prime-time fare will be originals. Asked to tip his hat, Levy said that TNT, for example, will have all original programming between 8 and 11 p.m. on Monday, Tuesday and Wednesday nights. Meanwhile, TBS, which covers NBA basketball from October to the end of May, will thus be "live and original" on Thursday nights.

The Perfect Storm continued:
The Perfect Storm Part I
The Perfect Storm Part II
The Perfect Storm Part III
The Perfect Storm Part IV
C3: Metric for the Market