Discovery’s Abruzzese Eyes Higher Cable Rates


Media buyers say it won’t be easy for Joe Abruzzese to get them to pay more for cable spots.

Abruzzese last week joined Discovery Networks as president of advertising sales, from CBS, declaring that cable prices will eventually reach parity with broadcast, and that he wants to accelerate the process.

Sales executives at cable networks have long argued that they should get a bigger share of the dollars spent on TV and that cable is underpriced. But buyers have long resisted, citing broadcast’s ability to reach broad audiences with a single spot as the reason for the big premium.

As much as they respect Abruzzese, buyers say cable just isn’t the same as broadcast.

“It’s a very different sell. It’s different when you’re really one of four – or maybe six – and one of 45,” said Steve Grubbs, CEO of PHD USA. “Discovery’s a superior organization with a highly recognized brand name that will work very much in his favor, but this is not going to be an overnight process where cable CPMs match network CPMs.”

“Is there a gap? Yes. Is the gap shrinking? In certain areas, yes. In other areas no. I wouldn’t put anything past Joe,” said John Muszynski, EVP and chief broadcast investment officer, Starcom North America.

Buyers say that after some 30 years in broadcast, Abruzzese brings integrity and experience to Discovery.

“If you think about all of the Viacom properties that Joe has been associated with – syndication, network television and cable – he’s got a knowledge of the cost basis for each of those,” Grubbs said. And that will help him make deals with major advertisers.

Abruzzese said his job is to “prove to advertisers that the audience is a great audience and the audience equalization is coming. So you can save money by spending more money in cable.”

Abruzzese said cable networks can earn premiums by offering marketers special sponsorships, and he may put someone in charge of that task as he reorganizes the sales staff.

“I think the client sponsorship stuff is how to break through the clutter and that is where the value comes in,” Abruzzese said.

“In a lot of those events and sponsorships, you really have to trust the party you’re doing business with,” Muszynski said. “And I don’t know if there’s anybody more trustworthy in the business.”

Billy Campbell, the new president of Discovery Networks U.S., became friendly with Abruzzese when they worked together at CBS. Campbell called the hiring “a watershed.”

“It’s a great day for cable and an especially amazing day for Discovery Networks,” he said.

Campbell said he knew his friend’s contract was about to expire. “I wasn’t going to let him get away.”

“My job really hadn’t changed in a while,” Abruzzese noted. “It would have been a different picture if they’d given me the entire company. But that was not going to happen.”

While cable deals generally involve smaller numbers than those on broadcast, Abruzzese’s check won’t get smaller, he said, so his personal CPM is going up.

Abruzzese’s arrival pushes Bill McGowan, one of cable’s best-known sales execs, into the No. 2 spot at Discovery. “Billion Dollar Bill,” as he is referred to, will tend to international and multiplatform deals.

Buyers said there’s nothing big that needs to be fixed at Discovery’s sales operation.

“They really value their product and make sure that you’re going to pay for that value,” said Muszynski. He expects Discovery to stay tough under Abruzzese. “Joe’s not going backwards. I know that.”

With Abruzzese in place, Campbell said he’ll be able to concentrate on programming, especially on the flagship Discovery Channel, which had a rough third quarter.

Campbell said production delays pushed some of Discovery’s new shows back to the first and second quarters.

“You will see significantly more original programming on Discovery, certainly over the next few quarters,” Campbell said. The network’s marketing campaign is also being freshened up.

In addition, Campbell has been in touch with some of his old Hollywood contacts, and he expects to announce some projects in development within a few weeks.


*Will Abruzzese bring more CBS staffers with him to Discovery?

*Will sponsorship and product placement affect the credibility of nonfiction programming?

COPYRIGHT 2002 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.

COPYRIGHT 2003 Gale Group

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