Commentary

Why TV's Upfront May Not Be Doomed

What's the role of the television upfronts?

I know the old answer was to convince advertisers where they should spend their money over the coming year, by teasing them with first-look views of the new programs that will garner the attention of the masses.  

In today’s world, this seems far less necessary.  

Lets face facts: Linear TV viewership is declining in favor of watching TV on-demand and across devices via streaming services on the Web.

The program landscape is dominated by a few shows that garner the majority of the attention and buzz. Some of these shows are not even supported by advertising— for example, HBO “Game of Thrones.”

Please don’t me wrong, I love “TV.”  I watch “TV” on the airplane, or in bed at night, or on the train into San Francisco.  I watch “TV” on my phone or on my iPad.  

The challenge for TV companies is, the shows I watch are not appointment viewing. I’m not watching them live — and in many cases, I’m not even watching them in the same season they air on TV.  I’m watching shows like “Arrow,” “The Flash” or “Blacklist” through iTunes and Netflix, and I likely pay for them or watch them a season late.  I don’t even bother recording shows on DVR anymore because I never sit on the couch to watch them.

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 In fact, nobody in my house sits on the couch to watch TV.  The couch has become the place for sports, video games or just catching up.  

The upfronts are almost a foregone conclusion.   Supporters point to effective CPMs still increasing year over year.  I’m curious what the year-over-year change has been network to network, and whether advertisers are spending the same percentage year over year against upfront programming versus.holding and using it for “TV” later in the year, across devices.  

Each year there are fewer and fewer new shows that break out; mostly the best shows continue to win attention and command the lion’s share of the budgets.  It seems the major networks are holding onto their best shows, clinging for dear life in an effort to delay the inevitable: the collapse of the upfront buying market and radical shift toward programmatic digital.  

What’s funny is, the shift to data-driven, cross-device programmatic with an upfront model would actually be a boon for TV.  If advertisers could buy not only the program, but also overlay the audience, and lock that in early, networks could charge an increased premium that would likely convert into more money for them in the long run.  Some of the networks are starting to package their shows this way, but the tools to make this delivery 100% possible and accurate are still a few years away.  

The future of the upfront season is actually brighter than the immediate future, which is murky at best.  

Some changes in leadership among the networks signal they “get it” as well, and that makes me feel confident enough to offer up this opinion.  The future is bright in a digital upfront universe. Get your sunglasses ready, but don’t be surprised when you see a huge dip for one to two years before things get righted.

11 comments about "Why TV's Upfront May Not Be Doomed".
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  1. Leonard Zachary from T___n__, May 17, 2017 at 10:26 a.m.

    "the shift to data-driven, cross-device programmatic with an upfront model" is way over ED's skis. 

  2. Ed Papazian from Media Dynamics Inc, May 17, 2017 at 12:13 p.m.

    Time to take your medication, LZ.

  3. Sheldon Senzon from JMS Media, Inc., May 17, 2017 at 12:39 p.m.

    Good job Cory, makes sense

  4. Sheldon Senzon from JMS Media, Inc., May 17, 2017 at 12:40 p.m.

    LZ, I second Ed's suggestion. Arrogant and under-informed, not a good combination pal.

  5. Leonard Zachary from T___n__ replied, May 17, 2017 at 2:55 p.m.

    Ed is cut from the same cloth of Nielsen ratings based on audience and frequency. I dare said he  has never looked at an Google ad panel, which is why Ed constantly discredits viewability, programmatic and any new innovation he does not understand. So yes he is over his skis. Ed's acclaimed study which once upon a time he offered to share but instead chose to hide for fear of scrutiny. I'm still waiting for it as the rest of the Digital world. What say you Sheldon? Higher retran fees and smaller audiences equals a sustainable growth model? I have not seen many VCs investing in that.

  6. Ed Papazian from Media Dynamics Inc, May 17, 2017 at 1:33 p.m.

    Thanks, Sheldon. I'm afraid that LZ is a hopeless case----a digital-obsessed Donald Trump.

  7. Ed Papazian from Media Dynamics Inc, May 17, 2017 at 3:22 p.m.

    LZ, I'll leave it to those who read these posts to evaluate who is right or wrong and who understands or doesn't----but not to you. Your behavior is, indeed Trump-like, which is why I pay no attention to your silly jibes and provocations. Please take your medication and stop acting like a troll.

  8. Leonard Zachary from T___n__ replied, May 17, 2017 at 3:32 p.m.

    Like Colbert said, keep saying my name :)

  9. Ed Papazian from Media Dynamics Inc, May 17, 2017 at 3:47 p.m.

    Assuming that LZ is your name---that is.

  10. Ed Papazian from Media Dynamics Inc, May 17, 2017 at 4:12 p.m.

    Turning to Cory's piece, I think that there are some interesting points about the upfront, but a few more might be added. One of the main reasons why many national TV advertisers get involved in the upfront is their belief --rightly or wrongly---that they should associate themselves with quality program environments and/or image enhancing content such as major sports, news and other prime time buys.These will be promoted to their "trade' distribution partners, and others well in advance. Such  certainties can not be left to the vagaries of chancy scatter avaiabilities. A second reason for corporate buying, as opposed to letting each brand go it alone---whenever the brand feels the need---is a totally justified fear of the power that this gives to the sellers who can not be expected to cave in to small budget brands on pricing or anything else, when they have bigger fish to fry. So it's a combination of ensuring availability of the types of content that an advertiser feels is needed and using the combined clout of all brands---not to get a better overall CPM, but to give the smaller brands in the corporate stable the benefit of the pooled dollar power of the larger brands at the negotiating table. One final point. If there was no upfront, the sellers would never know from month to month how many ad dollars they had booked in total--which, of course, would affect their CPM pricing. The probable solution would be much higher CPMs as a failsafe measure. And what of the agencies making the buys. If they had to handle many  huundreds of brands individually, could they still afford to charge only 1% for broadcast network buys and 2-3% for cable?

  11. David Smith from Mediasmith, May 17, 2017 at 7:06 p.m.

    Correct you are about the new potential, Corey.
    the reality is that no matter what the other reasons, metrics or content, they exist for two reasons
    1) network gets to gauge buyer interest in shows, new and old; also gets $$$ guarantee that pays the rent and more.
    2) advertiser gets assurance of deliverable base GRP/R/F on a continuity basis. For year round advertisers who have predictable budgets, it is crucial to not get shut out. Some years, plenty of scatter, others you would regret not making the upfront commitment. And you literally risk the brand....not worth the gamble to hold out...

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