TV Upfront: Big Four US Networks Lose Share to Cable

09 June 2004

As this year's annual broadcast network upfront bazaar enters the final straight, two things have become abundantly clear:

• The cupidity of America's Big Four networks -- ABC, CBS, Fox and NBC -- has resulted in a loss of upfront market share to cable rivals.

• Despite this, the relative price gap between broadcast primetime inventory and that of cable has widened in favour of the former -- thanks to a "high single-digit" increase in ad costs per thousand.

So reports US email bulletin MediaPost Daily News in its summary of this year's dickerfest.

Opines the bulletin: "It is now clear that Madison Avenue held the line on the broadcast networks' expansion, and shifted a considerable share of budgets to cable and syndication. The 2004-05 cable upfront marketing place is expected to expand by more than $500 million (€405.84m; £271.95m) and by as much as $800m, marking the first time since 1997 that a significant upfront share shift has occurred between broadcast and cable."

MediaPost quotes Peter Gardiner, partner and chief media officer at Deutsch: "Finally, people are starting to vote with their dollars as opposed to a lot of bulls**t before the upfront. Remember, planners have to write plans and then buyers have to go buy them. It's driven strategically."

But in the light of robust price increases, say the report's authors (Joe Mandese and Paul Gough), it's none too easy to quantify the extent of the wrist-slap handed out by buyers to the network quartet.

The latter is thought to have sold a slightly lower percentage of its prime-time inventory than in the past several upfronts -- including the economic doldrums of 2000-2002 -- which implies that a greater share of the Big Four's revenue base will hang on the upcoming season's scatter marketplace.

And the winners? MediaPost's verdict: "Media buyers and the cable industry at least are proclaiming the 2004-05 as a year of market correction."

Data sourced from: MediaPost Daily News (USA); additional content by WARC staff