Analyst Projects CPM Declines For Linear, Streaming Upfronts

Traditional TV upfront advertising pricing -- the cost-per-thousand viewers (CPMs) -- is poised to decline by mid single-digit percentages for this upfront marketplace season, according to UBS.

"Early indications suggest similar mid single digit rollbacks in traditional TV CPMs versus last year with the exception of sports programming that remains in high demand," writes John Hodulik, media analyst for UBS.

At the same time, streaming CPMs are projected to slip further -- falling more than 10%, due to rising ad volume from new entrants, especially Amazon Prime Video.

Prime Video -- which started up in January 2024 as a major new ad-supported option for consumers -- will add around 10% more streaming video ad inventory into the marketplace.



“We believe Amazon's launch of Prime Video with ads in late January will have the greatest impact on U.S. media and entertainment,” says Hodulik.

At the same time, much of this will have a negative impact on a more mature streaming marketplace where existing platforms may find it tougher to achieve business goals.

“We believe greater competition and new supply will limit some of the growth for incumbents in the CTV/streaming space,” says Hodulik.

According to one recent industry estimate for this upfront advertising season from performance marketing agency Media Culture, traditional linear TV upfront volume will be down 2% to $17.5 billion from a year ago, with streaming upfront deals to rise 37% to $18.6 billion this year.

Looking ahead, traditional TV volume is projected to decline 5% on average for this year through 2027, while streaming platforms -- excluding YouTube -- will grow 22%, per UBS. 

The total U.S. TV advertising marketplace will inch up less than 1% to around $70 billion through 2027 -- $46 billion for traditional TV (down from $55.3 billion in 2024) and $27 billion for streaming, AVOD and FAST platforms (up from $16.8 billion in 2024).

For the upfront season a year ago, Media Dynamics estimated the average broadcast CPM for the 2023-2024 upfront prime-time season at $48.05 for adult viewers, $22.15 for cable TV networks, and $38.50 for streaming platforms.

Looking ahead for the long term, UBS says streaming usage three years from now will climb to a 57% share of all TV time -- up from 40% in 2023 -- and for 2027, it projects streaming will have a 50% share of total ad-supported television, up from 29% in 2023.

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