Cable networks are on track to close out the upfront ad-selling season with about $1 billion more in their pockets than they had last year.
While negotiations continue, the bumper upfront period could conclude with cable networks finishing with between $9.1 billion and $9.2 billion — up 10 percent to 12 percent over last year.
The dramatic rise in cable advertising revenue — broadcast TV is expected to log a gain of just 2 percent — is tied to programming changes for broadcasters, such as the disappearance of ABC’s daytime soaps, the end of Oprah’s syndicated show and the question mark over the NFL season, all of which has put money into play in primetime that had been committed elsewhere in years past, market sources said.
Cable channels are charging double-digit rate increases and are generally said to be faring much better than broadcast networks, which collectively took in between $9 billion to $9.1 billion, according to several reports.
The sharp rise in TV ad spending by Madison Avenue comes as advertisers are sitting on cash hoards after post-recession cutbacks, and now they’re ready to spend in order to stimulate sales. Cable is a much cheaper place to do that than broadcast networks, as CPM rates are historically lower than broadcast.
Sources suggest that NBCU is taking in 25 percent more dollars than last year, with the cost of a thousand viewers up in the mid-teens. Negotiations are continuing, and the final result could change.
Discovery Communications could hit the $1 billion mark in ad commitments when upfront negotiations wrap up in a week or two. The group is said to have nabbed between 17 percent and 22 percent more money, with Toyota spending big there.