Commentary

The Real New, And All-Encompassing, Upfront Market: Does That Work For You?

Bad news for those national linear TV networks -- Magna says they will get hit this year with a 7% decline.

Here is the better side of that story: OTT streaming services -- the AVOD and FAST platforms that big TV-based media companies own -- will be rising, up 21%.

The breakdown: National TV networks will sink $36 billion (down from $38.4 million), while OTT ad-supported streaming will rise to $8 million (up from $6.6 million). Net-net: Total national TV/OTT premium video is estimated to be $44 billion in 2023 versus $45 billion (2022).

From that we can project there will be a modest $450 million drop.

Those TV network-based media companies -- owners of both linear and streaming platforms -- will be down 1%. Not that bad -- in theory.

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What does this mean for the upfront advertising market that is set to begin over the next four months?

One might suggest that just being even is a good thing. At the same time, there is another side of the business story -- the long road to see new competitive premium streaming services reaching profitability. Not so even.

But of course, many analysts are not so sure that even a new total upfront market (linear TV, long-form premium video) will continue to rise to new industry-wide benchmarks.

Measurement differences -- as well as possible new alternate currency third-party services that promote cross-platform measurement of linear TV and digital video -- are still in flux.

For one thing, there is no dominant, industry-wide and agreed-upon third-party cross-measurement measurement service.

TV sellers and buyers can be on different tracks -- even in the best of times -- when it comes orderly TV upfront annual marketplaces with decent pricing.

The question is really whether a merger of the minds will continue to prevail -- or will this just be a marketplace with continuing disparate content performance and campaign data?

And is that okay? If so, how much tougher will it be for media sellers and buyers to describe and determine the health of a given yearly market driven by total long-form, professionally produced content?

1 comment about "The Real New, And All-Encompassing, Upfront Market: Does That Work For You?".
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  1. Ed Papazian from Media Dynamics Inc, March 30, 2023 at 11:52 a.m.

    Interesting, Wayne. The upfront now encompasses both linear Tv and streaming---AVOD and FAST and together they will probably show a modest increase over the current season's upfront in total ad spend. But that remains to be seen.

    The important point from the TV network's point of view is how much of the projected AVOD/FAST ad dollars will go to their own ad-supported services and how much will go to rivals like ROKU,  Netflix, etc. . In view of the very slow and plodding start of the Netflix AVOD service, the TV networks may do fairly well in replacing lost linear dollars with streaming dollars.   Also part of the equation are the digital "sponsorship" sales that the TV networks have been making for some time now on their own websites---mostly using linear TV series episodes as their ad vehicles. These have involved an estimated $2-3 billion annualy, according to various sources.

    As for the issue of the  supposed lack of standard audience metrics. that's merely an annoyance in certain cases as Nielsen measures the in-home streaming audience sufficiently well to capture about 85-90% of the activity and can provide the basis for GRP delivery guarantees across most platforms the usual  way. In theory the new Nielsen service will be able to do the same in more detail and with much greater "granularity" where device usage "impressions" are concerned. Sadly, advertisers will not know who watched their commercials---but that's nothing new.

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About the Author

Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.