The 2022 Upfronts felt more like the IAB Newfronts than Upfronts in many ways, with most networks talking about impressions, algorithms and the shift to streaming. From Peacock and Paramount+ to announcements of an ad-supported Disney+ and rumors of what Netflix might do, the buzz was more about the current future of TV than the past TV landscape we once knew. Regardless, the future is bright for TV.
The Upfronts have historically been about the new shows and the post-launch parties where ad execs and brands alike ate, drank and enjoyed the celebrity petting zoo. This year had its share of celebrities and shows but just as many reboots like Hocus Pocus, Night Court, Bel-Air, Quantum Leap and so many more. The real story was the shift from GRPs to impressions and from linear to streaming as nearly every company's Upfront talked about their move to streaming and the emergence of dominance and strength with their depth in programming, live sports and movies -- most notably Amazon's pickup of Thursday Night Football for Prime Video, where the 2022 Thursday games will exclusively stream.
This shift is happening now and is happening for good reason. Industry leaders like NBC have put Nielsen on the ropes by betting on new currencies, doubling down on streaming and working to counter the massive shift that COVID viewing has created as sports and other viewing move to the new TV, CTV.
Couple the dropping linear viewership (Samsung reported 78% of their U.S. HHs mostly stream while only 22% mostly watch linear) with the many entrants into streaming further fragmenting the audience and viewer behavior, and it is easy to understand why CTV and streaming is the future of TV. This is not to say that linear is dead nor going away anytime soon, but programmers and broadcasters alike must now hitch their wagons to data, measurement and accountability -- or performance guarantees -- to keep hold of the valuable and coveted Madison Avenue dollar as the shift to streaming continues. More importantly, Madison Avenue is no longer the only place where that dollar is coming from. With CTV, Main Street and Madison Avenue are jumping into TV as a result of the lower price and ability to measure business outcomes. As viewership shifts, the ability to deliver TV with cost efficiency and performance almost certainly guarantees TV’s future success.
The future of TV has a "C" in it.
The way TV is sold must also change. While the Upfronts will continue to evolve, especially as NFL and other sports rights come up for bid, and as the potential for more live events move to streaming at scale, the market is not ready for them to go away. They still add value to showcase what’s now and what’s next as well as to begin trading discussions. However, buyers and sellers alike should expect less Upfront “trading” to happen. Buyers are prepared more now than ever to pay higher CPMs for their coveted audiences.
Are sellers prepared to not sell so much up front and instead wait for the programmatic market to drive rate and consumption? Or will they continue to sell up front and potentially undersell their inventory?
The one thing for sure is that as Main Street enters the TV market in a more meaningful way, sellers should recognize that there are new buyers who are prepared to pay more for the same impressions, and they also have deep pockets. When this recognition happens, the Upfront market as we just experienced it will change.
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