The advertising industry continues to take money out of what was once Madison Avenue’s most valuable media vehicle: prime-time television.
Advertising commitments for the next round of primetime television shows fell 3.5 percent to $9.34 billion in this year’s upfront market, while cable primetime commitments fell 4.8 percent to $9.065 billion, according to Media Dynamics Inc. The dwindling dollar figures show how the media industry is changing as more people turn to streaming video and other ways to watch their favorite shows, movies, news and sporting events.
At the same time, advertising spending on streaming video hubs increased by a remarkable 35.3 percent, rising to $11.1 billion from $8.2 billion in the previous market. The amount being spent on streaming video for the next television season is more than that spent on primetime television or primetime cable television – an industry first.
Media Dynamics Inc. is an advertising consulting firm that tracks the television industry’s annual “upfront” numbers, during which U.S. television networks attempt to sell the majority of their advertising inventory for the next programming cycle.
According to an analysis by Media Dynamics published on Wednesday, all of the growth was “attributable to streaming,” with the decline in linear television ultimately being limited “primarily to growth in the sports sector.”
In other words, it could have been worse.
In 2024, advertisers pulled 3.7% of the dollars they spent on primetime television overall from the medium. Total dollars allocated to the platform fell to nearly $18.41 billion, compared to nearly $19.1 billion in 2023. Last year, advertisers in the upfront market spent $9.575 billion on primetime television and $9.52 billion on primetime cable television, according to Media Dynamics — declines of 3% and 7%, respectively.
Despite the dwindling value of traditional TV, advertisers are still investing more money in the broader video business – linear and streaming – than last year. Total streaming and TV advertising commitments rose 8.1% to nearly $29.51 billion, compared to nearly $27.3 billion in 2023.
The cash drawdowns from the TV and cable businesses provide some support for two of the biggest TV companies – Warner Bros. Discovery and Paramount Global – in their decision to write down the value of their cable network portfolios in the second quarter. Warner said it spent $9.1 billion to write down its TV portfolio, which includes TNT, TBS and HGTV, citing declining advertising spending and the impending end of its TV rights deal with the NBA. Paramount, on the other hand, wrote down the value of its cable business, which includes networks such as MTV and Nickelodeon, by nearly $6 billion, citing operating declines and its planned merger with Skydance Media.
Most broadcasters have kept the details of their “open” negotiations secret. Many of them have noted an increase in total pledges but have not provided details on where the money was spent and which platforms it may have been withdrawn from.
Disney, for example, expects its total upfront commitments to increase 5% as advertisers focus on sports and streaming video. Fox reported an increase in upfront sales, driven primarily by sports and Tubi. NBCUniversal said national sales volume increased in upfront sales, but Comcast President Mike Cavanagh said during the parent company’s recent second-quarter earnings call that “our total volume will be essentially flat with last year, as will linear price.”
Paramount echoed this sentiment, with co-CEO Chris McCarthy stating that “linear volume trends were consistent with last year.” Warner Bros. Discovery did not provide further information on performance ahead of time, but cited demand for its Max streaming service and its sports offerings. TelevisaUnivision recently said it expects volume to increase in the “single-digit percentage range.”
In order to make more money overall, network operators had to reduce their tariffs – in some cases significantly.
“Buyers were determined to extract significant concessions from linear TV ad sellers for the second year in a row, something not seen in recent history. And they appear to have gotten what they wanted,” said Media Dynamics.
The cost to reach 1,000 viewers, a measure known as CPM that is the focus of annual upfront negotiations between TV networks and Madison Avenue, fell to $43.35 for broadcast and $20.60 for cable, declines of 5.6 percent and 6.8 percent, respectively. At the same time, the average CPM for a 30-second commercial on streaming fell 16.7 percent — a dynamic that undermined TV companies’ efforts to generate more advertising revenue.
Disney was among the companies that agreed to CPM “declines” in certain parts of its portfolio, particularly Disney+, according to four executives familiar with recent preliminary talks. Media Dynamics said the networks faced “tougher negotiations” as well as “a shift of dollars to FASTS.”
and Amazon or YouTube, all of which offered cheaper CPM pricing options.”
