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Confronting the 2021 Upfronts

Media experts have been talking about the impact of streaming services on primetime TV for years now. In 2020, the popularity of platforms such as Hulu, HBO Max or Discovery+ took on a whole new dimension as worldwide viewing time grew 44% in the last three months of 2020 according to Corviva. Nearly every American has at least one streaming subscription, and most of us have several. As we move towards streaming and away from broadcast and cable, what is this doing to the ad industry?

Follow the Ad Money

It’s no secret that ad dollars follow the consumer wherever they go, and if we’re all heading to streaming platforms, does that mean primetime TV will be left in the dust? A good place to look is the Upfronts. While they aren’t a good determinator of the total ad revenue TV networks will receive in the next year, they are a good guide for seeing where money is being spent.

2021 Upfronts

The Upfronts are a period of time in late spring/early summer when TV networks try to sell most of their primetime ad inventory for the upcoming year. Last year, this process lasted until the fall, but in 2021 things moved a lot faster and most deals were wrapped up quickly. This is a positive sign, but it doesn’t necessarily mean that primetime TV isn’t suffering from streaming’s influence.

TV networks have reported a record increase in ad rates, but this is in large part due to the new streaming services they offer. As Variety reports, the volume of advertising dollars in support of traditional linear TV is expected to rise by 2% to 6%, with other money being committed to new streaming offerings.

However, supply constraints mean networks still profit from Upfronts. With linear TV ratings in shorter supply every year, traditional media buyers rush to get their money down in schedules before the network sells out of audience impressions. In 2021, some advertisers were unable to get as much of their upfront mix due to the industry’s ongoing ratings declines.

A Great Migration?

Unlike cable and broadcast networks, streaming services have no such supply constraints with unit prices generally lower than those of linear TV. It’s difficult to say how many ad dollars have abandoned primetime TV for streaming platforms, but it’s safe to say a significant chunk has broken away. For instance, Reuters reports that ad revenue for Walt Disney (which owns ABC) for the upcoming fall TV season rose by double-digits, but 40% of it went to streaming or digital ads.

In the past, the success of broadcast and cable networks’ primetime schedules makes or breaks the Upfronts. This year, you have to consider the effect of streaming as well. Advertisers now put just as much emphasis on streaming ads as they do traditional TV ads, and networks have responded by jumping into the fray with their own offerings like Paramount+ or Peacock. However, they are brand new to an arena where others like Hulu or Amazon Prime Video have been around much longer.

So, is primetime TV being left behind in favor of streaming? Absolutely not, but as the 2021 Upfronts has shown us, streaming is certainly becoming a stronger force in the industry and a channel advertisers would be crazy to ignore.

Put Yourself Upfront and Center

The Ward Group has been on the scene for a while, offering traditional media buying services as well as new digital buying options. Whether you want to snatch up a limited amount of spots or you want to test the streaming waters, your next step is reaching out to our media stewards. We’ll walk you through the process and make sure each of your media dollars is spent as if they were our own.

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