Cable Upfront on Track to Beat Broadcast Tally for First Time

NEW YORK – Cable networks’ upfront advertising sales are on track to roughly match – for the first time – broadcast networks’ advance sales for next season, the Wall Street Journal reported on Monday. Some analysts even expect it to slightly exceed the broadcast haul.

The cable upfront increase, estimated at around 15 percent, is driven by advertisers’ willingness to reach the growing viewership for cable shows.

The Journal cited sources familiar with the upfront deal progress as saying that total upfront spending on cable could reach $9.1 billion to $9.3 billion, compared with $8 billion last year. The five broadcast networks’ upfront brought in an estimated $9 billion to $9.2 billion.

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Wunderlich Securities analyst Matthew Harrigan in a recent estimate also said that the cable upfront could hit $9.2 billion-plus – which could be larger than the broadcast haul.

The Journal said that ad buyers are expected to continue striking cable upfront deals until the end of the month with rates have risen 9 percent to 16 percent from last year, depending on the specific channel.

Barclays Capital analyst Anthony DiClemente said beyond the increase in cable viewers, “the narrowing of the pricing gap between broadcast and cable [ad] inventory” is also contributing to the improved cable performance.

Cable networks have also spent more on content in recent years in an attempt to draw better ad prices and affiliate fees. Time Warner’s TBS last year added Conan O’Brien to its evening lineup, and Oprah Winfrey teamed with Discovery Communications on her OWN network.

“The cable upfront should wrap up over the next week or so, with volumes up in the 15 percent range,” with ad rates up in the double digit percentage range for some players, such as Time Warner’s, Viacom’s and Scripps Networks Interactive’s networks groups, said UBS analyst John Janedis on Monday. “We also think some network groups may look to sell more inventory this year, potentially in the 60 percent range.”

Email: Georg.Szalai@thr.com

Twitter: @georgszalai