AT&T’s HBO Max says it already has $80 million in upfront advertising commitments for a planned launch of its advertising option in June. Speaking at its AT&T investor day on Friday, Jason Kilar, CEO of WarnerMedia, added that HBO Max profit margins and revenue continue to climb. “We believe we are already the No. 1 revenue-generating stand-alone subscription video-on-demand service in the U.S.” he says. “We earn 90% in margin from each retail subscriber that we add.”
Walt Disney finished upfront advertising for all its TV and digital advertising brands — ABC, Disney Channels Worldwide, ESPN, Freeform, FX Networks and National Geographic Networks — with a 5% gain in dollar volume, according to executives.
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.
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 weak TV upfront ad market is not worrying TV network executives. Speaking at the Nomura Digital Media Conference in New York, media selling executives said a weak-performing upfront TV ad market — where broadcast networks witnessed nearly an 8% reduction in advertising dollars to $8.45 billion, and where cable networks dipped almost 5% to $9.68 billion — is not a concern.
Of the Big Four network honchos, CBS CEO Leslie Moonves is the only one who still seems to know how to program to mass audiences, even if it is a dwindling mass, and believes in what he is doing. Broadcasting has no greater or more ardent champion. This TV season, Moonves and CBS were finally rewarded for their single-minded commitment to broadcasting by capturing the 18-49 demo crown.