5 Reasons Why This Upfront Will Be Good For TV Companies

  • by , Featured Contributor, April 26, 2018
We’re in the middle of upfront season, and once again there are all sorts of prognostications about how it might turn out. Here comes mine. I believe it will be a very good upfront for TV companies this year. Here’s why:

 1.     There is still an upfront. For years, pundits have been predicting the impending demise of the upfronts, saying that they’re archaic — a “horse and buggy” process in a digital world.

However, the upfront is still here, for a very simple reason: It is a futures market. We still have it because there is more demand for TV advertising — and for specific blocks of shows, networks and dayparts — than there is inventory to service that demand. Thus, advertisers and their TV media buyers need to lock in their buys and prices now, or risk not having enough inventory at the right price when they need it later this year or early next.  That’s good for TV companies.



2.     Audience losses fuel scarcity. Yes, it doesn’t seem fair, but when a product is precious, scarce and in demand by competing entities, prices can go up even if viewership falls. Moreover, digital video just doesn’t have the scale to be a true substitute for TV advertising for most big brands.

Don’t forget, Judge Judy still delivers more audience, watching more ads, in 30 minutes in the U.S. than Google’s YouTube can deliver all day. Increasing scarcity is good for TV companies.

3.     TV company mergers create even more uncertainty for buyers. Discovery recently completed its first upfront since merging with Scripps Networks. AT&T and Time Warner might merge soon, as well as CBS and Viacom. The same for Disney and big parts of FOX. This creates lots of new uncertainty – and nervousness – for buyers wondering what consolidated market power on the sales side might mean, and how it might impact legacy rates. In competitive auctions, nervous buyers pay more than they should. Nervous buyers are good for TV companies.

4.     TV doesn’t have fraud issues. The headlines around digital video are rife with words like fraud, viewability and bots. TV doesn’t have that problem. That is good for demand and good for TV companies.

5.     Many brands believe that they over-pivoted to digital. Marc Pritchard of Proctor & Gamble has been on a year-long roadshow talking about how P&G and other brands moved too much money from TV into digital over the past few years, which has hurt sales and return on ad investment. They are now moving money back to TV. That is good for TV companies.

I think this is going to be a very good upfront for TV companies. What do you think?

2 comments about "5 Reasons Why This Upfront Will Be Good For TV Companies".
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  1. Ed Papazian from Media Dynamics Inc, April 26, 2018 at 4:24 p.m.

    As we are reporting to "TV Dimensions 2018" subscribers in our new "Alert" series, Dave, we, too, are hearing positive reports about upfront spending and for much the same reasons. While this may or may not pan out---even private talk can be misleading, especially before the first big deal breaks and sets the tone for the market----the prognosis from our contacts is good.

  2. Dave Morgan from Simulmedia replied, April 26, 2018 at 4:34 p.m.

    Thanks Ed. Always makes me feel good to know that you and we are aligned :-)

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