What’s Old was New at This Year’s Upfronts

This year’s Upfronts mirrored the changes taking place in the industry as there was a greater focus on streamers, with Netflix, Amazon and YouTube dominating headlines and generating more buzz than their broadcast and cable counterparts. Despite the industry’s desire to embrace new technologies and fully enter the streaming era, progress from years past appears limited. For instance, live events and bundles were some of the major storylines, and streamers put an even greater emphasis on their advertising offerings this year.

The larger media companies have offered a unified linear and digital video offering for buyers with audience targeting at the core, and while it sounds good, execution appears to be far off. Further, Nielsen continues to be the main source of currency despite the emergence of alternative currencies in recent years, with many indicating that less than 10% of the large agencies will buy TV inventory outside of GRPs.

As the industry prepares for the months ahead and the Upfronts buys continue, what do these developments mean? We’ll explore in detail below.

Live events and bundles

Perhaps the biggest news that came out of this year’s Upfronts was that Netflix secured the rights to two NFL games on Christmas. This deal marks the latest entrance of Netflix into the sports space, and the streamer’s first significant entrance into live sports streaming. Beyond that, Disney and Warner Bros. are offering a Disney/Hulu/Max bundle and Comcast announced its StreamSaver bundle, which combines Peacock, Netflix and Apple TV+ at a discounted rate. This follows the announcement of Venu Sports earlier this year, where Disney, Warner Bros. and Fox Sports are bundling their sports offering in a streaming platform. And just this week Amazon looks to have secured NBA rights from Warner Bros. Discovery, a big shakeup in the live sports world.

With so much focus on bundles and live events, it’s clear that the industry is trying to replicate the cable model for the streaming era. However, their success is not a given as consumers have gotten used to the streaming model, where they can cancel a service at-will and can pick-and-choose based on what’s currently available.

These developments show that content providers are betting on a return to the cable model, but consumers have shown that they’ve become comfortable with the streaming model and might not want to return to the old days. It will be worth watching how consumers react to the bundling taking place in the industry and the viewership numbers for live events, and whether this changes how content providers approach future offerings.

Ad-supported offerings

Additionally, the Upfronts clearly showed traditional content providers like Disney, Warner Bros. and NBC leaned further into their streaming ad-supported offerings. These content providers have realized that more viewers are watching their content via streaming platforms, so they are putting a greater emphasis on content on their own streaming channels, like Peacock or Paramount+. However, they are not willing to lose the advertising revenue they would receive from linear broadcasts, so they are continuously relying on ad-supported tiers.

While many of these platforms were initially offered ad-free, the success of Netflix’s ad-supported tier, which reportedly has 40 million monthly global subscribers, has led them to focus on offering advertising opportunities. Netflix has demonstrated that consumers are willing to pay for their ad-tier because of their content offerings, which the newer platforms have not yet fully demonstrated. They will need to ensure that their content is worth the price of paying for ad-supported content, and that the advertising experience is relevant. Likely a big reason the sports content is in such high demand.

Further, cross-TV audience packaging is a big trend this year but execution has significant issues. Traditional media companies have leaned into cross-TV bundling with the ability for audience targeting across linear and digital.  A challenge in the execution of the bundles remains the fragmentation across the ecosystem. Some agencies still run in silos with linear and digital budgets separated.

Lagging alternative currencies

Alternative currencies emerged as a buzzword in recent years, as companies like iSpot and VideoAmp and Comscore sought to provide advertisers with options beyond Nielsen. Alternative currencies give advertisers a wider dataset to transact against and the chance for cross-platform measurement. Advertisers have expressed their eagerness to utilize alternative currencies during this year’s Upfronts, with Advertiser Perceptions research showing that more than half (59%) plan to test some form of alternative currencies this buying cycle. However, of those 59%, 32% plan to also use Nielsen currency. Additionally, 41% of those surveyed plan to use Nielsen only, suggesting that the hype cycle for alternative currencies will only continue into next year.

It will take a full push among the advertising community to lead this change and start embracing a new way of doing business. Until the industry as a whole starts buying beyond traditional demographics, Nielsen will continue to be the dominant currency and alt currencies will continue to be hyped ahead of every Upfront.

While the industry has promoted the idea of innovation at the Upfronts with a big focus on the steaming future, the actual consumer and advertising offerings put forth suggest that the industry is still stuck in a different time period. The promise of new technology offerings and alternative currencies remain a far-off vision, with buyers and sellers seemingly pushing off these innovations every year. For the industry to truly take the next step, it’s time for advertisers, content providers to embrace the streaming era and to fully adopt the currencies that will unlock better advertising offerings, which will in turn lead to better ROI.