The Perfect Storm Part IV
April 7, 2008
continued from:
The Perfect Storm Part III
"When the stock market declined in 2001, CNBC's ratings followed, down about 40 percent, but HGTV's ratings actually are up because consumers think they will now be staying in their homes four to five years longer and look to us for ideas to make their homes more enjoyable."
David Cassaro, president/sales, Comcast Networks (home of E!, Style and G-4) sees targeted, original programming as his network's greatest strength going into the upfront. But he offers a caveat: "I'm talking about targeted, original programming that delivers young, affluent viewers. Our brands among those demos have never been higher."
Indeed, E's Girls Next Door ranks as its No. 1 series among women 18-34 while also attracting a large general audience (1.4 million viewers per episode). Its "Live from the Red Carpet" events, along with edgy, topical programming, gave E its most-watched February in network history. In fact, The Soup, with its 10 p.m. time slot, is up 43 percent in HH rating and up 60 percent among adults 18-49. "These shows are not salacious and gratuitous, but credible and fun."
Most important for advertisers, however, Cassaro underscores E!, Style and G4 (which largely skews young men) "bring a valued demographic, young 18-34-year-olds, which are scarce. And scarcity drives demand."
Cassaro, not one for hype of any kind, says cable will have a much better upfront this year-that is, cable nets with "a valuable audience that is the result of well-done, targeted programming." "A steady flow of dollars to cable is an old story," Cassaro says. "Scarcity of ratings will be the driver."
Mitch Oscar, executive vp at Carat Digital, has a few comments to all of the above. "Cable ratings haven't really gone up," he says. And even those cable hits like TNT's The Closer "don't mean anything because advertisers could find the same audience demo buying NBC."
That said, however, Oscar admits that "those highly specialized cable networks that have loyal audiences and loyal advertisers, like Nat Geo and HGTV, will do well this year because people are going to certain cable programming and sticking with them."
Kris Magel, newly named senior vp/director of national broadcast at Initiative, agrees: "All the factors stated indicate a shift of dollars towards cable." But not all the money will shift to another TV medium. Magel also sees upfront dollars going to "other network alternatives such as syndication and cinema."
Another caveat Magel offered involves those hefty scatter increases. "Cable probably had a better scatter season this year than they would have if the writer's strike hadn't happened… and if [broadcast] hadn't carried underdelivery into '07/'08, which tightened up the network market considerably, raising prices to unbearable levels and probably chasing money to cable."
Network underdelivery is no small point. Indeed, as Rino Scanzoni, Chief Investment Officer for Group M, explains, "At least 70 percent of all ratings points are already on cable TV." Scanzoni notes that "a significant amount of clients' schedules are on cable because that's where the eyeballs have gone."
True enough. But what's making cable network sales execs salivate are increases in pricing for that cable schedule.
Which brings us back to that old, lamented paradigm. "Pricing is still supply and demand at the end of the day," Scanzoni says. "Yes, there will be a lot of posturing, a lot of nonsense. And scatter is very robust. But rating points are down, and even if broadcast revenues are down, because there's so little remaining inventory, the market will probably overcorrect."
In the end, the agency titan muses, "We never really know how much sticks. It's all about what people believe or expect for the future. And, frankly, I don't worry about the upfront because it's not a very good predictor at all of the future."
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
