Earlier this week, USA Networks, a cable network owned by NBCUniversal, announced that it was going to join upfront week with a presentation of its own. USA is not the first cable network to crash the historically broadcast monopoly. ESPN and Turner Networks added presentations of their own to the week over the past few years.
So, ironically, just as the voices of pundits predicting the demise of the upfronts grow louder, the upfronts defy gravity and become more important within the television advertising world, not less. I’m new to television advertising, but the more I learn about the industry, the more I understand and appreciate the power and value of the upfronts. It makes a lot of sense for USA to throw its hat in that ring, and I believe we will see even more cable networks be part of the ad sales fest over time. Here’s why:
Scale is scarce and auctions maximize price. The fragmentation of media audiences makes TV audiences more valuable than ever to large national advertisers. Online is great, but it can’t cume scaled audiences anything like TV can. The number of networks and shows with big audiences exceeds the number of large advertisers seeking to reach them. If you want to maximize value, invite all the buyers into a room at once and make them compete for it.
Audience fragmentation has eroded separation between broadcast and cable. Large cable networks like USA are beginning to look a lot like smaller broadcast networks. If you take the football audiences out of NBC, its audience numbers don’t look that much different from its sister network USA, and the trend lines favor USA. Baby sis has grown up and now deserves her own seat at the party.
It worked for Turner. New NBCU cable network sales boss Linda Yaccarino was previously a top sales exec at Turner, and knows firsthand how well that company’s participation in the upfronts last year equated into premium pricing for its shows, particularly the NCAA March Madness packages. She’s seen this movie before and knows how to play on the big stage.
Highlights TV’s advantages relative to online. As much as online advertising is growing and can do powerful things, it can’t deliver anything close to the impact and audience scale of TV. The more that TV media owners are able to highlight their offerings and demonstrate their scale and ability to deliver both TV audiences and companion Web and social audiences, the more they will resist the attempts of Web companies to take dollars away from them.
What do you think? Are the upfronts only going to get stronger?