The US TV upfront for 2023–24 faced an uncertain economic backdrop and strikes by actors and writers, but longer-term shifts in viewing habits may be the most important factor to think about, argues Cathy Taylor, WARC’s US Commissioning Editor.

As summer winds down, so has the upfront ad sales marketplace, a languid, three-month long affair this year that seems to have ultimately resulted in a ho-hum 3% increase in revenue in the US TV universe, including linear channels, streaming and various other types of CTV inventory. The entire take is estimated by intelligence provider Media Dynamics to have come in at about $27.1bn.

In the US Spotlight that WARC published in May ahead of this year’s upfront, media consultancy Advertiser Perceptions reported that slightly more than a quarter of advertisers thought they would increase upfront spend in 2023, a dramatic drop from the 51% that did so in 2022, so the estimated final upfront tally seems about right.

This “meh” upfront was also in line with recent data from WARC Media’s global ad forecast, which predicts that US ad spending will rise by a comparatively modest albeit not insignificant – 2.2%, reaching a total value of $303.6bn this year.

Given the iffy economy, the forecasts and the facts seem to align.

The upfront isn’t just about the economy

It used to be a reasonable assumption to simply connect the dots between the broader economy and the outcome of the upfront, and use the resultant trendline as a performance indicator for the wider marketing industry.

But that’s no longer the case.

In fact, what we’ve seen this year is the outcome of several different, and not all that related, dynamics: The uncertain economy, sure – but also changing viewing habits, confusion over which media currencies to transact on, and, to a lesser extent than one might think, the current strikes by the US writers’ and actors’ unions.

Dig deeper, and it’s more about viewing behavior

Look at the data beneath the surface, and you’ll find that money is flowing away from most linear television and very much toward streaming platforms and sports, where some of the increases in ad commitments appear to be substantial.

Streaming giant Netflix, which has seen a doubling of monthly active users for its ad-supported tier from five million to ten million just since May, is said to have achieved “top-of-market pricing” in its first upfront.

Elsewhere, more than 40% of the upfront money coming into Disney went to its streaming and digital offerings: Hulu, Disney+ and ESPN+.

Fox executives told reporters on background that upfront commitments towards its sports programming, the free ad-supported (FAST) streaming service Tubi, and Fox News Media all increased. (Conversely, they didn’t have all that much to offer about how traditional programming fared, except to say something about increases in sold inventory.)

NBCU, which has the broadcast rights to the 2024 Paris Olympics in the US (and will keep Olympic broadcasting rights through 2032), said that ad commitments were moving at double the pace they did for the pandemic-delayed Tokyo Games in 2021.

According to an article in Deadline, the media giant currently has $100m in commitments from companies that did not advertise during the Games in Tokyo.

Sports programming was also key to upfront successes at NBCU’s streaming service, Peacock, with an increase in commitments of around 30%. (Virtually every video property at NBCU will air Olympic content, including Telemundo, the USA Network and CNBC.)

As Variety reporter Brian Sternberg observed of the overall picture, “The results spotlight Madison Avenue’s increasing disenchantment with traditional primetime TV as a vehicle for reaching the millions of consumers whose dollars they crave.”

(Caveat: Getting precise figures concerning how the major media owners fared is almost impossible, as much of the “data” is made up of numbers whispered off the record by agency and media execs to the trade press, or oblique references made during earnings calls.)

Did the strikes affect the upfront?

The writers’ and actors’ strikes started in May and July, respectively, and show no sign of being resolved any time soon.

This means the fall TV slate is a mishmash of reality shows, game shows (some with recycled questions because of the writers’ strike), scripted reruns and transplants from other platforms or markets.

CBS, for instance, is adding the UK version of its sitcom Ghosts to a primetime slot, along with the Paramount+ streaming series, Yellowstone, which was the number-two show of the 2022/2023 TV season in the US, according to Nielsen’s platform-agnostic list of the Top 100 programs.

So, to return to my earlier question, would the upfront have turned out differently had the strikes not been part of the mix? It doesn’t seem that likely. Here are three reasons why:

  1. Declines in linear TV viewing pre-date the strikes – by a long shot. July marked yet another milestone in the decline of linear TV viewing, with combined viewership of broadcast and cable dropping below half of all viewership, at 49.6%, according to Nielsen’s figures – but these declines have been building for years.
  2. Streaming viewership continues to grow, in spite of a relative lack of new programming, rising by 25.3% since last July. Nielsen notes that the continued growth of streaming services isn’t because of new series, but older ones.
    A case in point: Suits, the legal drama starring Meghan Markle that originally ran for nine seasons between 2011 and 2019, has been a surprise winner this summer for Netflix, while the Australian animated kids’ series Bluey, available on Disney+, has also been a hit.
    This suggests that, with so much programming already out there, there is plenty of appetite for existing content, even as the writers and actors haggle it out with media owners over the terms for creating new content. Or, as a recent New York Times headline trumpeted, “As Hollywood Strikes Roll On, Viewers Have a Chance to Catch Up.”
  3. Sports, reality and game shows are ratings hits, regardless. Even as the major video platforms – linear and streaming alike – scramble to pull together fall schedules, the need for stop-gap content isn’t as dire as it might seem. Almost half of the top 100 primetime shows of the just-concluded season were sports, reality or game shows – the very genres that content producers are relying on as the strikes continue.

Undoubtedly, the video landscape will be a better place once the strikes are over. But the amount and variety of existing content suggests that this year’s upfront may be best seen through the lens of longer-term changes in viewing habits – with the economy, and the Hollywood labor disputes, very much in supporting roles.