It’s probably TV’s biggest week, and it’s not even on the air.
Upfront Week, happening now here in New York, brings execs from ad agencies, media buying firms and advertisers together to hear from the networks (over-the-air and cable) about their planned fall schedules and their new and returning shows. The Upfront presentations are giant dog & pony shows in high-profile spots like Radio City, Lincoln Center and Carnegie Hall, and the nets trot out their stars, putting their late-night hosts Jimmy Kimmel, Steven Colbert and Jimmy Fallon to work as emcees.
There’s big money at stake – upwards of $16 billion in advance commitments by advertisers to buy time in the nets’ primetime schedules next season. Advertisers scramble over each other to buy positions in what they are betting will be the big hits next fall. They’re afraid if they wait, they could get locked out of a hit show, or if they can buy spots in the fall, the prices will be quite a bit higher. That’s been the traditional thinking that’s enabled the networks to keep raising prices for ad time, even as their audience continues to shrink.
Years ago when the late media buying guru Gene Dewitt was a client, I’d line up interviews for him with ad biz reporters at The N.Y. Times, USA Today, The L.A. Times, CNN and the ad trades, where he’d make his prognostications on which new shows would be hits and which would fail. He also would decry the whole upfront process, claiming it pits advertisers against each other in a feeding frenzy that really only serves the networks -- pushing their ad prices higher. For years, Gene used to predict the end of the upfront marketplace, encouraging advertisers to forego the hyped feeding frenzy and push back, demanding better programming, more audience data and an orderly structure for pricing and buying ad time.
And here we are, a dozen or more years later as the Upfront is again underway.
Stories in The Times (New York and Los Angeles) are reporting that this year’s Upfront could see only a small increase in sales – maybe 3% -- or even a decline of 2 or 3%.
There are a number of factors converging to bring a change, not only in Upfront spending, but in ad spending on TV overall throughout the year. One analyst quoted in the L.A. Times says it will go down by 2% this year.
What’s happening?
* TV viewership is down. Except for major sports and news events, TV doesn’t draw in the huge number of viewers that it used to. The nation no longer tunes in, almost as a whole, to see Ed Sullivan on a Sunday night. Primetime viewership over the past three years is down from 10% (FOX) to as much as 24% (ABC.) Only NBC has seen an increase of 7%, thanks only to a bump last year fueled by its mega-hit “This is Us.”
* We can watch what we want when we want. And we can go to so many more places for news – 24/7 and even reflecting our own political biases, if we choose. The amount of programming is mind-boggling. Where we used to have perhaps 100 choices of scripted programs between the 3 or 4 major networks, we can now choose from more than 600 scripted programs on the networks, on cable and now on streaming platforms like Netflix, Hulu and Amazon, ready to play whenever we choose.
* Add to the networks’ woes the fact that coveted younger viewers (the 18-49 demo) are watching less and less of anything on regular TV. Many don’t even own a TV or they are not hooked to an antenna or cable. They stream bits and pieces on their laptops, tables or phones... or their unconnected big-screen TVs.
So as the TV audience disappears and fragments, the networks hope to raise their ad prices yet again. This year, the average $134,000 cost for 30 seconds on primetime was 6% higher than it was the previous season. Even if it does go up again for next season, how many more years will advertisers keep paying higher prices for fewer eyeballs?
It’s not totally bleak for the networks. The shows they produce bring in money for them when they are shown on other platforms. And some shows that eventually go into syndication can be a golden goose for the producing network and/or the producing studio, often owned by the network or the network’s parent company.
And meanwhile, we’re in the midst of another Upfront Week. With lavish over-the-top presentations and parties, it’s good for New York’s economy, if nothing else.