Did Madison Avenue fill NBCUniversal‘s coffers or not during this year’s decidedly difficult “upfront” market? The answer is hard to discern.
The Comcast-backed media conglomerate on Friday acknowledged that it had wrapped negotiations in the TV industry’s annual upfront, when U.S. TV companies try to sell the bulk of their commercial inventory ahead of their next cycles of programming. “NBCUniversal can confirm growth in our Total Cash Commitments for our 2024-25 Upfront, driven by our by key priority business areas includingaudiences, live programming and streaming,” said Mark Marshall, NBCUniversal’s chairman in a statement to PvNew. Still, the company did not quantify the increase, or compare it to figures from previous upfront markets.
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In 2023, NBCUniversal said that it expected to win “total cash commitmentsroughly in line with last year,” when the company secured what is believed to be north of $7 billion in advertising deals with its sponsors.
NBCU’s stance in the 2024 market reflects a difficult period between the TV networks and advertisers. Top, high-quality video remains a major lure for ad dollars from blue-chip marketers ranging from Apple to Zillow. But in the streaming era, audiences for even the nation’s favorite comedies, dramas and reality programs are harder to find. More TV viewers watch such stuff at times of their own choosing, rather than en masse at 9 p.m. on a Wednesday night. That has splintered the big crowds that once flocked to traditional TV, and sent advertisers looking for better-defined niche crowds cobbled together through digital data and programmatic algorithms.
TV’s money scramble takes place in one of the most difficult bargaining sessions in recent memory. Executives on both sides of the negotiating table agree that overall dollar volume is likely to be down. The dim outlook comes as advertisers move their dollars to streaming and digital media, where there is less pressure to place ad cash months in advance, which is what upfront bookings represent. What’s more,there is a significant increase of digital-video inventory available, thanks to Amazon Prime Video’s recent decision to make its basic streaming service ad-supported.
Signs of the pressure have abounded in recent weeks.
Disney has in some cases agreed to reduce CPMs — a central measure of upfront negotiations that examines the cost of reaching 1,000 viewers –for Disney+ by as much as 10% to 15%, according to several executives familiar with recent talks. In exchange for the lowered rates, Disney is securing deals that call for a certain level of volume of ad support across its portfolio. But some of Disney’s rate capitulation angered rivals, who had hoped not to roll back their numbers to such a degree, and are being forced to do so in order to match Disney’s offer. Meanwhile, Netflix on Thursday parted ways with Peter Naylor, a veteran senior ad-sales executive who has largely served as the company’s face over the past year and a half in its efforts to sell commercials on an ad-supported tier that have not been embraced as widely as the company might have hoped.
This upfront marks the second consecutive one in which the networks have agreed to so-called CPM “rollbacks” — and the second consecutive one in which the volume of ad dollars promised has been projected to be in decline. Ad commitments in last year’s upfront market for primetime broadcast TV fell 3%, to $9.595 billion, compared with $9.91 billion in 2022, according to Media Dynamics Inc., an advertising consultancy that tracks the market. Cable TV saw even worse erosion, with advertisers committing $9.52 billion for primetime, down 7% compared to the $10.23 billion in commitments secured in 2022.
The rising number of screens and viewer behaviors has only clouded what has already been a very opaque process. In a different era, the success of the upfront was often determined in part by whether or not a TV network’s primetime schedule — typically the most-watched programs that win the biggest ad prices — was able to generate a bigger volume of commitments over the previous year’s market. In 2024, however, one person’s primetime may come at noon on a Saturday while another’s takes place at 5 p.m. in the middle of the week.
Doing so made it easier to gauge how the networks fared. Primetime consisted of the same number of hours across the board and measuring it offered a sort of apples-to-apples comparison of, say, Fox’s performance versus that of CBS. When viewers can binge-watch an entire season of a show several months after its broadcast debut, or pick out random episodes of their own choosing across a subscription service, primetime is anytime.
In recent years, the big media companies have tried to spotlight the total volume of commitments they win. It’s not an easy number to track and is difficult to use in comparisons, because media-conglomerate portfolios vary in size and assets. Some companies have a large local component; others have delved more deeply into digital.
No matter what numbers the networks try to burnish, the entire effort can represent an exercise in futility. Upfront volume figures don’t come close to representing money in the bank. As part of a process that goes back past the days of “Bonanza” and “The Beverly Hillbillies,” advertisers make a commitment in May or June to buy a certain amount of ad inventory come September, holiday time or at some moment in the spring. But those commitments can be yanked or reshaped depending on how shows move around on a particular network’s schedule, whether desired audiences are increasing or ebbing in digital media, or on the advertiser’s whim at several points during the length of the TV season. Indeed, many Wall Street analysts have found little correlation between the numbers that emerge in May and June and the revenue figures the networks book at the end of their fiscal year.
Some details about NBCU’s performance were made available Friday. The company saw commitments rise for digital sports programming, and from small and medium-sized advertisers who can afford to buy national TV now that it’s available via digital windows, where individual audiences are smaller and commercials can be targeted to specific regions or consumer types.
As for the whole picture? If NBCU and its rivals don’t start painting with more color and detail, some analysts and viewers may walk away with the conclusion that there’s nothing much to see.
