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 $307 billion in TV’s upfront, but the pace of spending growth has declined dramatically in recent years.
The report shows that the 1995-96 to 1999-2000 period saw an 82% increase over the 1990-91 to 1994-95 period, with the networks up 56% and cable doubling its take. The amount spent on the upfront over the past five seasons saw increases of only 11% over the previous 5-year interval, with cable up 29% and the broadcast networks up a mere 1%.
Five-Year Primetime Upfront Ad Dollar Growth Rates (% Change From Previous 5-Season Period) | |||
| B’Cast Nets | Cable | Total |
1995-96 to 1999-2000 | +56% | +200% | +82% |
2000-01 to 2004-05 | +33 | +90 | +50 |
2005-06 to 2009-10 | +7 | +39 | +19 |
2010-11 to 2014-15 | +1 | +29 | +11 |
Source: Media Dynamics, February 2015 |
Ed Papazian, President of Media Dynamics, Inc., notes that “… (though) the slowdown in upfront spending is a function of declined economic growth… digital media has also begun to siphon off upfront dollars… ”
In the early-1990s, says the report, ABC, CBS and NBC routinely garnered 70% of the primetime upfront sales. That number has since dropped to only 37%. On the other hand, cable attracted only 18% of upfront ad dollars in the early-90s, but its share has risen to 51%. In terms of absolute dollar yield, NBC was tops in the first 15 seasons measured, but CBS has led since then.
TV Primetime Upfront Sales By Network | |||||||
| % Share | ||||||
| ABC | CBS | NBC | Fox | Other B’Cast | Cable | Total$ (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.