Programmers are once again gearing up to serve the sliders and signature cocktails, and parade talent among the assembled media planners and buyers, hoping to sell their content as "the right place" to allocate a significant piece of advertising budgets.
Yes, the upfront presentation season will begin anew on March 6. Viacom Inc.'s Nickelodeon/Nick At Nite (US) is up first, setting the stage for programmers and advertisers to engage in the annual upfront advertising sales ritual in which the respective sides look to peddle and procure commercial inventory ahead of the new fall television season.
After a couple of down selling periods for the 2013-14 and 2014-15 TV seasons, the prime-time upfront has grown during the last two negotiating periods. This growth has occurred even as linear audiences have receded with the rise of ad-free viewing platforms as Netflix Inc. and Amazon.com Inc.'s Amazon Prime, and as younger people are consuming more short-form content from digital companies like Facebook Inc. and Google Inc.'s YouTube.
Last year, a number of media prognosticators anticipated a flat or declining upfront, but traditional programmers sold $19.7 billion worth of upfront advertising for the 2017-18 TV season, a 5.9% gain from $18.6 billion for 2016-17. That was up 4.6% from $17.8 billion in the prior period, according to estimates by media consultancy Media Dynamics.
Broadcast networks ABC (US), CBS (US) The CW (US), FOX (US) and NBC (US) specifically combined to sell some $9.1 billion in ads for the 2017-18 season, a 4.1% rise from $8.75 billion the prior year. National cable networks scored a 7.6% increase to $10.6 billion for the current TV season from nearly $9.88 billion in 2016-17, according to Media Dynamics.
Media Dynamics attributed some of the 2017-18 uptick to cross-platform packages sold across media conglomerates' broadcast and cable holdings and a small, but growing, number of advanced targeting deals. The gains also reflected increased online sales activity for the traditional programmers, many of whom were strident during their presentations last year in taking digital platforms to task about ad placements against offensive content, not to mention questions concerning viewability and measurement accuracy.
(Speaking of digital, media planners and buyers will not have to sort their way through as many digital presentations in Manhattan this spring — at least in formal, public settings — as the Interactive Advertising Bureau’s 2018 Digital Content NewFronts schedule has been scaled back to one week (April 30-May 4) from two. IAB, though, plans a second NewFronts week in Los Angeles during the fourth quarter.)
Comedian Sarah Silverman at a Hulu NewFront event
Several factors coming out of the broadcasters' camps will no doubt impact upfront negotiations. First, after a nearly decade absence, The CW will re-enter the Sunday original programming mix this fall, presenting a pair of hours that night, thus raising its weekly total to 12 hours from Sunday through Friday.
FOX, meanwhile, has secured rights to the NFL’s "Thursday Night Football" package, and will air 11 games per season under a five-year deal valued at a reported $3.30 billion. Last year, the company’s upfront presentation skewed heavily toward sports. Under the banner "we own the fall," FOX trumpeted its expanded college football slate in conjunction with its Sunday afternoon NFL package and MLB’s postseason rights, capped by the World Series. With another night of NFL fare, FOX figures to riff off that theme again.
Former "TNF" rights-holders CBS and NBC, however, will not be interrupting their fall lineups for pro football, as they return to lineup continuity on an extremely important night of the week for auto-makers, studios, retailers and restaurants to tout their weekend promotional/sale activities.
On the company’s recent earnings call, CBS Corp. Chairman and CEO Les Moonves told analysts that the company recorded 70% of its 2017-18 upfront deals based on C7 measurement, up from 20%-25% the prior year. Moonves anticipates that C7 will be the currency for all of the programmer's deals this year and said "our job now is to get paid from C7 to C35, which could be an extra 3% or something like that in terms of viewers."
C7 measures the average viewing of commercial minutes in live programming, plus DVR playback for seven days thereafter. C35 gauges average commercial minutes in live programming, plus extends DVR viewing to 35 days.
Meanwhile, NBCUniversal Media LLC's push to reduce prime-time ad time by 10% in original programming across its broadcast and cable portfolio this fall may be one of the largest variable of all. While Turner Broadcasting System Inc.'s TNT (US) and truTV (US) and networks owned by Viacom have decreased the number of ads, their efforts have not been nearly as broad as NBCU’s gambit, which also aims to enhance viewer experience, increase ratings and make advertisers more engaging and effective.
It remains unclear whether other programmers will follow NBCU’s lead in looking to shop fewer ads, while collecting higher rates to reflect the messages presumed higher value.
We already know that AMC Networks Inc., which holds four of ad-supported cable’s top seven dramas, including top-ranked "The Walking Dead," does not plan to do so.
AMC Networks COO Ed Carroll on the company’s fourth-quarter earnings call March 1 said it will deploy resources prioritizing audience segmenting and targeting during this selling season, but is "not planning any adjustments to our advertising inventory at this moment."
Finally, large programming M&A, of course, looms over the upfront season as pending tie-ups between cable network giants like Discovery Communications Inc. and Scripps Networks Interactive Inc. and media conglomerates like Walt Disney Co. and 21st Century Fox Inc. could eventually make a big impact on negotiations.
As Discovery’s purchase of Scripps Networks is expected to close in the next couple of weeks, that deal obviously could have more immediate effects on the ad market. The combined company will control a 20% share of ad-supported cable audiences in the U.S., with particular strength among women.