TV’s upfront market is starting to close and ad dollars seem harder to collect.
NBCUniversal expects the volume of advance advertising commitments secured in the annual haggle to be “in the same range as last year,” according to Jeff Shell, CEO of the Comcast owned unit. He said that declines due to “cord cutting were offset by pricing and Peacock for us,” during remarks made at an investor conference organized by Credit Suisse. Variety estimated that NBCU secured between $2.68 billion and $2.98 billion in 2021, compared with $2.68 billion and $2.84 billion in 2020. TV networks try to sell the bulk of their commercial inventory for their next programming cycle in this annual negotiation between media companies and Madison Avenue.
“We are pretty much done,” said Shell, noting that NBCU still had a “smattering” of inventory to sell.
NBCU’s results reflect a somewhat softer market for TV. The haggling takes place in a tricky economy. The networks have largely agreed to take narrower pricing hikes than last year, according to multiple people familiar with the negotiations. Why? Because they realize that the threat of a recession and supply-chain issues have left their clients with less visibility into the future. Already, tech giant Microsoft has indicated it will sit out this year’s upfront, auto advertisers are pulling back, and the networks will have to hope the company will put money down in the so-called “scatter” market, when advertising is purchased much closer to air date.
In addition to the narrower price hikes, the networks are also granting more flexibility, giving advertisers new leeway to bump ad schedules if need be. “We are embracing flexibility more than ever,” says one buying executive. “ More flexible partners and clients will get more dollars.”
Shell also indicated the scatter market is weakening, noting that it is “definitely weaker than it was last week, last month, last year.”
His comments echo those of Paramount Global CEO Bob Bakish, who described the advertising market as “choppy” and noted that the company is seeing “some challenges, given the economic headwinds.” Bakish said Paramount Global was “80% to 90% done” with its upfront discussions.
More to come…
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