The Down-Low on Upfronts

If the first Monday of May is for the Met Gala, the third week of May is for Upfronts.

Television network executives descended upon New York last week to host advertisers in an annual weeklong meetup known as Upfronts. Over the course of the week, each network hosts its own lavish presentation, previewing for advertisers their promising upcoming lineup of shows and stars, while hopefully convincing them to purchase ad time on their airwaves.

Over the last few years, Upfronts have become an increasingly large spectacle, with networks flying in their top stars and performers to woo advertisers.

Photo courtesy of The Hollywood Reporter

 This year’s attendees were treated to a comedy routine by Seth Meyers at NBC, a song and dance from Stephen Colbert at CBS and cookies served to them by Gordon Ramsey at Fox. At Turner’s event, Anderson Cooper, Shaquille O’Neil and Conan O’Brien sat down for a panel, while the entire cast of Scandal showed up at the ABC upfront to promote the show’s final season.

Amidst (and occasionally drowned out by) such performances, network executives like CBS’s Les Moonves and NBC’s Linda Yaccarino took to the stage to convince advertisers that despite an increasingly depressing outlook for broadcast television, their networks are still worth investing in. The big message pressed by the networks was: “stay the course.”

In an increasingly fragmented media environment, in which both audiences and advertisers are being spread thin, networks are being hit where it hurts. Ratings are down, and as a result, so is ad revenue.

Across the board, network programs are hemorrhaging viewers. According to Vulture, only ABC’s The Bachelor managed to increase its audience share in the critical 18-50 demographic. All other shows across Fox, ABC, NBC, CBS and the CW lost audiences (save for the CW’s Jane the Virgin and CBS’s Hawaii Five-O, who held steady).

Fewer audiences are tuning in to traditional broadcasts, even when viewership from platforms like DVR and Hulu are counted. Networks not only have to contend with each other for audiences, but also basic cable networks, premium cable networks, and online subscription services like Amazon Prime and Hulu.

Even for networks that can prove their market worth, getting advertisers to invest in broadcast has become increasingly complicated. Online sites like Facebook and YouTube have become increasingly large advertising draws. Thus, at this year’s Upfronts, many executives faced the problem head on, preaching the virtues of advertising on television over such social media platforms.

At Fox, executives compared deliverable results of online ads versus ads shown on their broadcasts. At NBC, Yaccarino emphasized the human element of ad placement and selection on television. As The Hollywood Reporter put it, “advertisers won’t find their spots next to anti-Semitic videos, unlike on YouTube.”

Erin Burnett is usually OutFront but is with me today at #TurnerUpfront presentation.

A post shared by Wolf Blitzer (@wolfblitzer) on

Despite occasionally problematic blips with advertising algorithms, Madison Avenue’s advertisers are still flocking to online ads. CBS Chairman Les Moonves told reporters that ad revenue now accounts for 50% or less of the company’s overall revenue.

With less money coming in from advertising, the entire structure of programming at the networks is shifting. At the Upfronts, it became clear that networks are focusing in on vertical integration. Networks hunkered down on studio-owned content, in both pilot pickups and series renewals, banking on syndication and licensing fees in the future for revenue.

For the first time in recent history, both NBC and Fox picked up only pilots produced by their own studios.

When it came to series renewals, the networks were harsh on out-of-network series. ABC cut their number two show ‘Last Man Standing’ (produced by 20th Television), while CBS’s mainstay ‘2 Broke Girls’ (Warner Bros) was canceled after five high performing seasons.

By purging their lineups of outside-studio content, the networks save a significant amount of money on licensing fees, which can be a massive leach if the shows are not ratings (and advertising) successes. By picking up exclusively studio-owned content, the networks ensure that they will reap the benefits of any syndication, international, or off-network deals.  

Of course, shows from outside studios continue to play a large part in network programming. Despite their hardline with pilots, a large portion of NBC’s upfront was spent touting the 20th Century Fox hit ‘This is Us,’ and CBS continues to depend on Warner Bros ‘The Big Bang Theory’ in their comedy lineup.

As revenue models continue to change and both audiences and advertisers continue to leave, Hollywood may be facing a new television landscape – one where only network-owned programming makes it to air.

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