In another sign of weakening ad demand — and a troubling indicator for 2020-21 upfront network TV ad negotiations — the delta between upfront and scatter ad prices narrowed to its closest point in recent memory in April, according to a Media Daily News analysis of data from SQAD.
While TV networks continue to negotiate upfront deals — looking for mid-double-digit percentage price increases — TV ad revenues show a flat and/or downward trend over the last two years. Standard Media Index says upfront-placed advertising revenue for the better part of last TV season — October 2018 through April 2019 — came in at $19.3 billion, down 3% on a two-year compound annual growth-rate basis.
Questions remain, especially concerning upfront price inflation, messaging effectiveness, lower audiences and realistic commercial reduction of network schedules.
Upfront revenues for November for the 2016-17 TV season are up 9% versus November 2015, with broadcast revenues 5% higher than a year ago and cable networks added 13%, according to Standard Media Index. In comparison, overall scatter revenues is down versus a year ago — 20%. Broadcast networks are off 29% in November scatter TV revenues; cable networks giving back 8%.
As the TV networks report their 4Q and full-year results, their execs are saying TV advertising is holding up well under the onslaught from digital media. In fact, they add, first-quarter scatter spending continues strong and they are looking forward to a robust upfront market. So while waiting for the pure-plays to report their numbers, let’s remember that strong network sales bodes well for local sales, not to mention the national economy.
A boost in scatter spending lifts TV out of recent doldrums, with broadcast up 7% and cable up 4% in first quarter when you take out 2014 Winter Games dollars.
CBS senior research executive David Poltrack estimates the four broadcast networks will grow 5% in advertising revenue in 2011 — in part by some 20% or more higher scatter pricing. But not all networks will benefit.