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State of the Screens

As TV Industry’s $20 Billion Week Starts, Signs That Streaming Isn’t King Yet

By May 23, 2019No Comments

The upfront presentations have wrapped, and negotiations have begun on $20B+ in TV ad spend. The final presentation was The CW on May 16th.

What are the upfronts? The upfronts are an annual event where the networks showcase their planned programming for the upcoming season. Advertisers can purchase advertising “up front” at a negotiated price versus later in the scatter market, which can cost 15–40% more.

Interesting: The two biggest headlines to come out of the week (Disney/Hulu and NBCU/streaming/The Office) were unrelated to the upfronts themselves.

Upfront ad spend by year (% growth YoY) according to eMarketer:
1) 2008–09 — $16.8B (↑ 1%)
2) 2009–10 — $14.7B (↓ 13%)
3) 2010–11 — $16.6B (↑ 13%)
4) 2011–12 — $17.9B (↑ 8%)
5) 2012–13 — $18.7B (↑ 4%)
6) 2013–14 — $19.2B (↑ 3%)
7) 2014–15 — $18.4B (↓ 4%)
8) 2015–16 — $17.8B (↓ 3%)
9) 2016–17 — $18.6B (↑ 5%)
10) 2017–18 — $19.7B (↑ 6%)
11) 2018–19 — $20.8B (↑ 5%)
12) 2019–20 — $21.3B (↑ 2%)
13) 2020–21 — $21.6B (↑ 2%)

Projected change in upfront spend according to Advertiser Perception:
1) Same — 46%
2) More — 40%
3) Less — 14%

National TV ad spend by year according to eMarketer:
1)
2016 — $43.3B (↑ 1%)
2) 2017 — $42.3B (↓ 2%)
3) 2018 — $41.7B (↓ 1%)
4) 2019 — $41.2B (↓ 1%)
5) 2020 — $40.6B (↓ 1%)

The challenge: Broadcast ratings have fallen 24% over the past 2 seasons, which makes growing the overall ad spend a problem.

Quick math on viewership/cost changes in 2018–19:
1)
Ratings — ↓ 11%
2)
Total upfront ad spend — ↑ 5%
3)
Average CPMs — ↑ 18%

Quote from Gibbs Haljun — Managing Director, Media Investment @ Mindshare:
“There is a finite amount of quality rating points [a measure of viewership] in linear television. Everyone fighting for that smaller and smaller amount results in inflation.”

Podcast: Why Are the TV Upfronts Still a Big Deal?

Video(s): Watch Trailers for All the New Broadcast Shows

More #1: Why We Still Need The TV Upfronts In 2019

More #2: Upfront 2019: TV Advertising Isn’t Dead (Yet)

More #3: The Best And Worst Of The 2019 TV Upfronts

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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