TV advertisers are changing the channel
I'm Kim Masters and this is Hollywood breakdown joining me as my regular Banter Buddy on the business at felony and Matt normally a lot of reporters would be gathering with a with masses and masses of advertisers in New York. This time of year for the upfront presentations when these advertisers are are given very splashy star studded presentations in places like Carnegie Hall Where CBS does presentation and these they unroll the fall shows and they they and there's huge parties. I mean this is where billions of dollars worth of advertising are are starting to get sold on the basis of the shows. I remember the year back when they played. Abc played the entire pilot for modern family. That's really rare. It's what you do when you think you have something great and you think all the advertisers will want to be a part of it and you can make a lot of money. So of course there's not a prince this year and their virtual. They're doing these things they're trying to do them. In one way or another different networks taking different approaches some of them are having sort of virtual presentations. Some of them are having smaller. Smaller group presentations virtually of course and it augurs badly all of this because advertisers are really fleeing the businesses not there. It's going to really really be devastating for television that is driven by advertising. Yeah I mean this has been analogize by a couple of analysts to the two thousand eight recession and what that did for the print advertising market which is it exacerbated trends that were already afoot and just absolutely accelerated and made them devastating to the print. Business and people think that this might be the case for traditional LINEAR AD driven networks. Where there are you know. They're the trend has been away from these massive commitments but the business has been okay because they've been able to get creative and come up with hybrid ad packages that a lot of advertisers could buy into but this year. I mean there was a Wall Street Journal piece this past week that estimated just in the third quarter between a billion and one point five billion in ad commitments are just going to go away and advertisers are experimenting more and they're seeing more traction on digital platforms and they're using this pandemic to experiment and do do things and will that Ad. Revenue Comeback knows. Yeah they have the ability advertisers in many cases to cancel existing commitments. To get out there trying to I mean they buy these ads well in advance of the TV season and they do have in some cases an chance. They did have a chance to cut back on some of their commitments before may first so things like General Motors pepsi-cola and and Pepsico and cracker barrel and General Mills. Big Huge companies have been trying to take advantage of that cancellation option to varying degrees. And and there was a survey released from something called advertiser perceptions that marketers will plan to spend thirty three percent less this year during the up fronts compared with last year and that is a six point. Six billion dollar decline. If that's right and I'll read you a quote from the one of their executives the upfront strikes at the heart of the uncertainty advertisers are struggling with. They can't commit long term but at the same time you know they do. Advertising isn't going to go permanently away if you're hoping lower to attract customers you got gotta advertise somewhere and TV. I think it's still a big tent broadcast TV. And the ratings have been up for broadcast network. They've been up everywhere during the pandemic. But we're starting to see some softening as these were made it. Home episodes become more ubiquitous. I think that's probably going to continue over the summer. In the fall. People are afraid to spend money so advertisers can advertise but people aren't necessarily buying and those companies are hurting to thank you. Matt thank you. That's Matt Bellamy joins me this Monday at one thirty business. I'm Kim Masters and this is the Hollywood breakdown.