Magazine article Variety

Upstarts Crash the Upfront Party

Magazine article Variety

Upstarts Crash the Upfront Party

Article excerpt

During this year's upfront market, TV networks more than ever will have to compete outside the box.

For decades, the main rivals in the annual springtime haggle over commercial inventory in TV's new fall season have been, well, other TV nets. In an earlier era, broadcasters wrestled among themselves for money from Procter & Gamble and Heinz. Then cable joined the mix. Now all sorts of digital video players are threatening to keep Big TV from wielding a club.

To be sure, TV has been j fending off YouTube, Yahoo ) and the rest of the digital field for the past few years. But in 2014, advertisers seem more comfortable embedding their messages in all kinds of video - and that may give rise to new dynamics in this old-school advertising market.

The upfront buying and selling frenzy that is the dominant force in the U.S. TV ad market typically erupts in early June. And it's preceded by a string of promotional events from networks and cablers large and small. With more outlets jockeying for premium ad dollars, it's no surprise that upfront presentation season seems to get longer every year.

On Feb. 26 the startup cable network El Rey, backed by director Robert Rodriguez and Univision, unveiled its programming slate with an upfront-like pitch to advertisers. Weather Channel, Hallmark and Nickelodeon are among the early movers this year with presentations (followed, of course, by cocktails) for media buyers in the coming weeks.

"The forces that are at play are making it more of a video marketplace in general, and not so much a television marketplace," said one media-buying executive. With so much to choose from, advertisers are being very selective and trying to find growth areas, the executive said.

To be sure, new players are dwarfed by more traditional ones. Advertisers spend $60 billion to $70 billion annually on U.S. TV of all stripes - broadcast, cable, local, syndication and Spanish-language. Meantime, 2012 Internet ad spending came to approximately $36.6 billion, according to the Internet Advertising Bureau. Of that total, just $3.4 billion was spent on mobile advertising.

But there's a growing sense TV's market share is ebbing. Ad-buying firm ZenithOptimedia has projected television's portion of global ad spending will begin to fall marginally after 2013, tumbling to 39.3% in 2016 after peaking at 40.2% last year.

TV networks, however, have had something to crow about in the early part of 2014. …

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