Soft Spring Forecast For Syndication Upfront

Continuing a recent trend, syndicated TV is headed for another ho-hum upfront this spring, according to media buyers, sellers and media analysts.

Ad spending on first-run and off-net TV shows is expected to be down by single-digit percentages from last year or, at best, flat, they say.

Roughly two-thirds of the year’s syndicated TV ad spending is booked in the upfront, which is expected to kick off around Memorial Day and be largely wrapped up by the Fourth of July

“Everything we are seeing this year suggests a continuing softening of TV,” says Neil Vendetti, executive vice president of national video activation at media buying agency ZenithOptimedia. “It’s not a bad market. It’s just a less robust TV market.”

Forecaster Jack Myers, chairman of MediaBizNet, is even less optimistic about the upfront. “I’m expecting the upfront to be a repeat of last year, but even less positive,” he says. “For the broadcast year 2015-16, I expect syndication to be down 4% to 5%.”

But even at that, syndication will do better than other traditional TV media, he adds. “There are a lot of dynamics in place to suggest that marketers are holding back budgets, even in this generally strong economy.”

Syndication’s sluggish ad market is reflective of the overall national TV ad market. Last year, upfront spending on national TV — including network, cable and syndication — was down about 5%, according to Pivotal Research analyst Brian Wieser.

He attributes the decline to agencies shifting dollars out of TV and the failure of big advertising categories like pharmaceutical and wireless to emerge,

“Advertisers are cutting their spending and TV is the place that feels it the most,” says Wieser. “But, more than that, there is an absence of new categories that would be the drivers of growth.”

Still, despite the so-so prospect for syndication overall, media buyers and sellers say top-rated syndicated first run shows such as Warner Bros.’ Ellen, CBS Television Distribution’s Dr. Phil, NBCUniversal’s Steve Harvey and off-network shows like Twentieth Television’s Modern Family and Warner Bros.’ The Big Bang Theory will sell out quickly with prices significantly up over last year.

Buyers sometimes see such shows as interchangeable with network TV shows, the experts say. “For a lot of our clients, the off-network sitcoms and dramas are used for their consistent ratings and, in some cases, they’re better than primetime ratings,” says ZenithOptimedia’s Vendetti.

“Demand for the Big Bang Theory is very strong,” says John O’Hara, EVP of Warner Bros. Brand Networks. “It sold out in first quarter and it’s nearly sold out for second quarter. Mike and Molly has been doing very well for us and we’re excited about 2 Broke Girls this fall.”

“If you have a program that reaches a large, diverse audience, you will be the beneficiary of advertising dollars,” says Michael Teicher, EVP of media sales for Twentieth Television. Twentieth also handles ad sales for Debmar-Mercury, producer and distributor of Wendy Williams and distributor of FremantleMedia North America’s No. 1 game show Family Feud.

“Ellen bucks the trend of syndicated shows not generating buzz,” says Vendetti. “There’s a premium to be paid for that.”

Ellen is tied with Disney-ABC’s Live with Kelly & Michael at No. 2 among talk shows this season, slightly behind Dr. Phil, according to Nielsen. Ellen also has a huge social media audience, including 17.1 million Facebook followers and 36 million Twitter followers.

Offsetting the growth in A-list shows are mid-tier programs like CBS Television Distribution’s Rachael Ray with modest but stable ratings. Such shows can take weeks to sell out.

Lower-rated shows and conflict talk shows that many advertisers shy away from are bought on the cheap and can take months to sell out, if they ever do.

This year’s upfront may also be hurt by the dearth of high-profile rookie shows. There are only three this fall: Disney-ABC’s The FAB Life with Tyra Banks; Warner Bros.’ 4 p.m. news lead-in Crime Watch Daily; and NBCUniveral’s Crazy Talk.

“It’s great to have new shows to get advertisers’ attention, especially if it’s unique like Crazy Talk,” says.Bo Argentino, SVP ad sales at NBCUniversal Domestic Television Distribution. “But it’s more valuable to have shows that grow, like Steve Harvey, or that continue to perform consistently, which many of ours do.”

Syndication has a few strengths over other types of TV that make it appealing to some advertisers. For instance, 95% of syndicated shows are viewed live, not on DVR playback, which is important for time-sensitive advertisers like retailers and movies.

A few ad categories are propping up syndicated TV revenue, the experts say. “While the market has not been unbelievably strong, we have identified pockets of strength,” Teicher says. “We are doing very well with low-cost and prepaid wireless services. We are seeing movie spending on the rise. And there are a number of pharmaceuticals that are doing very well.”

Brightening the picture somewhat is the resurgence of the scatter market — ad spending outside the upfront, says Warner Bros.’ O’Hara.

“That’s often a precursor to the upfront,” he says. “We see good demand in second quarter. And it’s not just one category. We’re seeing strength in pharmaceutical, packaged goods and telco.”

NBCUniversal’s Argentino agrees. “In scatter, fourth quarter and first quarter were quieter than we would have liked,” she says. “But second quarter has picked up. So, we feel pretty good going into the upfront.”