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In what proved to be the softest summer market since 2001, cable saw its 2009-10 upfront take diminish by 12% as the networks wrote $6.73 billion in business.
Although the Cabletelevision Advertising Bureau has yet to issue a definitive tally, network and media agency sources concurred with the figure, which was derived from a base sum of $7.65 billion in the 2008-09 bazaar.
Contributing to the $920 million shortfall were a mix of battered client budgets, mid-single-digit CPM rollbacks and ad sales executives’ desire to hold back inventory for scatter — a strategy that has paid off thus far in the fourth quarter, as avails fetch high-single-digit premiums over upfront pricing.
Two years ago, cable nailed down $7 billion in upfront business, up 6.5% compared with 2006.
As ad spending begins to creep back to pre-recessionary levels, analysts believe that cable will enjoy a significant lift in the near term. This week, UBS forecast cable ad sales will grow 6% in 2010, with Discovery Communications, Disney and Scripps Networks expected to see ad dollars increase 7%. The Turner nets and News Corp.’s cable properties should see a 6% uptick, per UBS, and Viacom could grow its ad revenue by as much as 5%.
“We believe that a return to the historical trend will lag into 2011, but … the bottom line is that the advertising spending trend will return to historical levels,” the UBS report concluded.
Meanwhile, Credit Suisse estimates that broadcasters saw a 22% drop in volume as the networks booked $7.2 billion in upfront business. All told, some $2.9 billion in TV dollars was left on the table this summer.
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