• by Wayne Friedman , Staff Writer, April 17, 2024

Upfront TV media buyers expect a soft overall marketplace again, according to all media agency executives at the MediaPost Outfront event held this week.

But the main question is: How soft?

Last year, the linear TV marketplace upfront advertising market was down 5% in total revenue volume to $19 billion, according to Media Dynamics. More could be coming.

A major piece of the puzzle comes from the decision made earlier this year when Amazon Prime Video decided to unleash its big premium streaming service with an advertising option. 

That all means highly motivated and hungry premium platforms from legacy TV network companies -- including Peacock, Max, Paramount+ -- might be shaking a bit.

Tons of new advertising inventory with the potential to reach a maximum 150 million Amazon Prime customers could severely depress already low streaming advertising prices. Estimates of around $30 CPMs (the cost per thousand 18 and older viewers) could drop into mid-teens. 

So those financially on-the-edge streamers -- Peacock, Max, Paramount+, for example -- will be pushing volume not to hit up big CPM price gains but to fill big volume revenue holes to ultimately achieve steady profitability.

Now into the span of five years, legacy premium streaming launches -- starting in 2019 with services like Disney+ -- the pressure is now on for financial stability, if not growth.

What about Amazon's individual sales effort?

One media seller who attended the Outfront believed Prime Video could be under a little pressure -- possibly with the ability to make low CPM deals, waiting for the shake out in the business to come.

Considering Amazon's wide range profitable related existing businesses -- including $47 billion in worldwide advertising revenues -- it would be entirely comfortable to let Prime Video ad platform dig in slow, stable roots, while putting the kibosh on legacy TV owned streamers' fragile business.

Still, there are some positive factors going for legacy TV streamers -- perhaps some high-quality original program content tricks up their sleeve. 

In addition, Peacock has been heavily ramping up sport programming on its platform -- and not just limited by NBC “Sunday Night Football” games. 

This also includes NASCAR, Big Ten football and basketball, golf, rugby, cycling (Tour De France), U.K. Premier League football, and other sports franchises. Paramount+ looks to do that same, with NFL and NCAA games as well as soccer, including Italy's top Series A football.

Still, all this maneuvering by these still young legacy-based streamers' platforms need to move on to the next level.

Amid mostly net losses for these new businesses, Media Dynamics estimates legacy TV-owned streaming for the upfront a year ago amassed $8 billion in ad revenue. That is good news. 

The trouble is that major cash-positive digital-first streamers Prime Video, Netflix and Apple TV+ are in it for the long term with money to burn.

Legacy TV-streaming on the back foot? Time to step on the gas this upfront. Open the taps, and make as many deals as possible.