Commentary

Pace Of Upfront Dramatically Slowing

According to a new report from Media Matters, and a compilation from season-by-season data in TV Dimensions 2015 from TV Dimensions, over the past 25 seasons advertisers have invested $307 billion in TV’s upfront, but the pace of spending growth has declined dramatically in recent years.

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The report shows that the 1995-96 to 1999-2000 period saw an 82% increase over the 1990-91 to 1994-95 period, with the networks up 56% and cable doubling its take. The amount spent on the upfront over the past five seasons saw increases of only 11% over the previous 5-year interval, with cable up 29% and the broadcast networks up a mere 1%.

Five-Year Primetime Upfront Ad Dollar Growth Rates (% Change From Previous 5-Season Period)

 

B’Cast Nets

Cable

Total

1995-96 to 1999-2000

+56%

+200%

+82%

2000-01 to 2004-05

+33

+90

+50

2005-06 to 2009-10

+7

+39

+19

2010-11 to 2014-15

+1

+29

+11

Source: Media Dynamics, February 2015

Ed Papazian, President of Media Dynamics, Inc., notes that “… (though) the slowdown in upfront spending is a function of declined economic growth… digital media has also begun to siphon off upfront dollars… ”

In the early-1990s, says the report, ABC, CBS and NBC routinely garnered 70% of the primetime upfront sales. That number has since dropped to only 37%. On the other hand, cable attracted only 18% of upfront ad dollars in the early-90s, but its share has risen to 51%. In terms of absolute dollar yield, NBC was tops in the first 15 seasons measured, but CBS has led since then.

TV Primetime Upfront Sales By Network

 

% Share

 

ABC

CBS

NBC

 Fox

Other

B’Cast

Cable

Total$ (Mil.)

1990-91 to 1994-95

22.2

21.5

26.4

11.7

--

18.2

24.5

1995-96 to 1999-2000

17.4

14.5

22.3

13.4

2.5

29.9

44.7

2000-01 to 2004-05

13.3

14.1

18.3

11.0

5.4

37.9

66.9

2005-06 to 2009-10

14.0

4.9

13.4

10.8

2.7

44.2

79.9

2010-11 to 2014-15

12.4

14.4

10.1

10.3

2.3

50.5

90.5

 

1990-91 to 2014-15

14.5

15.1

15.8

11.1

2.9

40.6

306.5

Source: Media Dynamics, February 2015

Media Dynamics concludes by reporting that during the past 25 years only four seasons witnessed spending declines, 1991-92; 2001-02; 2009-10 and 2014-15. Given that the first three instances each saw rebounds in the subsequent seasons, Papazian expects to see an uptick in the 2015-16 upfront, perhaps on the order of 5%.

However, says the report, if this does not materialize and spending again drops, this may indicate a major realignment in advertiser budgeting, driven by competition from digital media and economic issues. This should be a powerful sign for the broadcast networks, who need to intensify their expansion into the digital arena.

In short, Papazian asserts, “… the 2015-16 season should be the most significant upfront in years, and possibly a tipping point for traditional TV’s dominance.”

 For more information from Media Matters, please visit here.

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