Upfront TV Shifts Could Mean A Stronger Scatter Market, Disruptive Pricing

The upfront market for next year’s TV season may see just 30% to 50% of inventory sold on TV networks. That's much less than what is typically sold — with the bulk of the inventory sold during the scatter market, according to analysts.

But perhaps more disruption will come with pricing — not just lower unit pricing, dropping cost per thousands viewing costs, but the coveted “base” pricing levels for upfront marketers being affected.

Some worry about legacy “base” pricing that TV marketers have and whether that could change if upfront buying volume deals drift lower. Perhaps -- if an advertiser might only place 30% of national TV dollars in upfront deals rather than around 70% or 80%.

From a TV network's sales point of view, lower spending in terms of upfront ad revenue could affect cost-per-thousand viewing price levels.

However, subsequent scatter dollar volume going higher in deal-making could stem TV ad sales declines.



Scatter market TV ad buying is month-by-month -- or quarter-by-quarter -- purchasing of national TV advertising inventory.

In addition, in the near-term, all this disruption may help cable TV networks and lesser TV broadcast network platforms, according to some media executives.

The upfront market is now in a fragile state overall. This is largely because big broadcast TV productions of TV shows are still in a suspended state. There is no clear schedule for when things will restart. Add in major TV sports programming being off the air, too.

A rough guess is that the upfront market may get going by the end of November/December — with the start of the new TV season up and running in January.

In the meantime -- through the rest of 2020 -- big brand TV marketers will still need to buy awareness impressions anywhere they can get them -- broadcast, cable, OTT platforms, etc.

Talking to UBS Global Research, Andy Donchin, chairman of Dentsu’s Amplifi media unit, estimates 40% to 50% of second-quarter national TV deals have either been cancelled or shifted to other periods later in the year.

But where does that money go -- especially when new premium broadcast TV prime-time programming is months away from being on the air?

Beyond higher-flying TV cable news network viewing, recent Nielsen data shows cable network groups with stable entertainment and/or non-scripted programming -- such as Discovery Inc. networks, especially HGTV and Food Network, as well a Hallmark Channel, A+E’ History and others -- might benefit.

The next key data point comes in two weeks, May 1. That’s when results for the third-quarter option period could be revealed. Major national TV marketers typically have options to cancel up to 50% of upfront inventory in the July through September period, bought in June/July 2019.

Looking for winners/losers in this emotional/trying TV business period? Forget it. It’s more about the survivors.

1 comment about "Upfront TV Shifts Could Mean A Stronger Scatter Market, Disruptive Pricing".
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  1. Ed Papazian from Media Dynamics Inc, April 20, 2020 at 1:49 p.m.

    Wayne, regarding a possible shift of the impending national TV upfront to the fall for a calendar year "season". there are issues to consider. First, a January start for new show introductions would be a poor time as most calendar year marketers enter the new year slowly--and spending is considerably below the norm during January. Hence a February start would be better for the sellers as well as the buyers. The second problem is do you now relegate the key fourth quarter to secondary status--using mostly reruns or do you  provide first run quality fare for this quarter as well. If so, how do you guarantee GRPs for schedules in such programs as well as holdovers without knowing what they are or how the holdover entries may fare? I suspect that a shift to the fall for the 2020-21 "season" may be for a nine-month truncated upfront, leaving the sellers the option to return to normal via a June upfront sale for a 2021-22 season which starts the usual way---in the fall and carries over to September.

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