The Upfront Show Must Go On Media Companies Refine Pitches

The Upfront Show Must Go On: Media Companies Refine Pitches As They Navigate WGA Strike, Gloomy Economic Climate, and Streaming Postponement

In advance


Even without a one-off strike or Twitter bombshell, next week would already present a challenge for media companies, which are conducting their annual previews for ad buyers next week in New York.

Advertisers face a difficult economic climate and a number of existential questions. What is the relevance of a prime-time program when live linear transmission continues to decline? How will streaming profit models play out in a world of cable cutting? How will advertisers feel the same rush they used to feel when they put their chips in the hottest new sitcom or serial drama and watched those bets pay off?

“If you look at it up front, there’s a lot of fear and excitement — a mix of the two,” said Rita Ferro, Disney’s president of advertising sales and partnerships. “Shoppers still love this time of year. You get to see the best of what’s coming from the companies and the companies are excited to showcase that.”

Mark Marshall, who was appointed interim chairman of ad sales and partnerships at NBCUniversal on Friday after Linda Yaccarino’s surprise departure and anticipated move to Twitter’s CEO, expressed optimism nonetheless in an interview with Deadline this week.

“We’re feeling significantly better than we were a few months ago,” he said, before Thursday’s news about Yaccarino added more jaw-dropping drama to next week’s ritual. “Supply chain issues have improved, inflation is slowing. The job market is still evolving, which means consumers still have money to spend.”

During the near-concluding wave of first-quarter earnings reports, media and tech companies reported significant advertising weakness but hoped for a rebound in the second half of 2023.

“Remember, upfront, this is a futures market,” Marshall said. In the fourth quarter alone, he counts, there will be 16 major releases from film studios, 17 new car launches and 10 new drugs being launched by pharmaceutical companies. All of this requires paid presence on TV and streaming.

With billions of dollars in the balance (a key part of the more than $60 billion in annual TV advertising revenue) and YouTube and Netflix now getting caught up in the traditional broadcast week, media advertisers have reason to sweat. One group polled by Deadline who were about to take the stage noted that the mood ranged from determined to hopeful, with a strong “The show must go on” energy. This is more than understandable given that over the past three years (remember last year’s Omicron spike?) Covid has turned the rhythm of decades-established upfronts on its head. So having a show at all is seen as a plus (after all, a lot of talent had to zoom in last year even without a strike).

The WGA impasse, already in its second week, will nonetheless alter the preview presentations. Late night presenters will no longer pick up the mic as their shows are grim and there are no guild writers available to joke with. Other talent is also retreating to avoid risking exceeding the picket lines expected across Manhattan. Fox expects there will be only unscripted and sports personalities, while Bravo will play a big part in NBCU’s plans, for example.

“We have great respect for the creative community and for unions,” Ferro said. “It’s been tough for everyone.” As for Disney’s event at the newly renovated North Javits Center, she added, “Yes, there will be talent,” although Deadline has learned that some celebrities like Jimmy Kimmel have dropped out. “The show will be beautiful, with moments of surprise and joy.”

“We’re still in the process of putting the splashy together,” Jon Steinlauf, Warner Bros. Discovery’s chief US ad officer, said in an interview. “We continue. We do a show at MSG on Wednesday morning and expect a big audience for it, but it’s a different year. … We’re trying to make sure the celebrity presence is what we want it to be. … It’s a changing situation. We’re working on it. It’s not going to be like last year.” In that regard, he added, the presentation should be more solid than last year’s as the $43 billion merger of WarnerMedia and Discovery closes just under a month ahead of the 2022 upfront became.

Two companies have opted out of live events entirely. Paramount transitioned from its long-running success at Carnegie Hall to a series of smaller dinners around the country a few months ago. Netflix referred to the strike just a few days ago because the company had suspended its live show at the Paris theater in favor of a virtual event. The CW, under new ownership Nexstar Media, opts for a lower-wattage press breakfast and client luncheon in contrast to the station’s traditional weeklong extravaganza at the New York City Center theater.

“I really think it worked out a lot better that way,” said John Halley, president of Paramount Advertising. “We’re having much more detailed and productive conversations and people feel like they can really get involved instead of rushing from event to event.”

Marshall acknowledged that NBCU’s longstanding Radio City location could well be a picket target, but said advertisers didn’t appear to be deterred. “We didn’t get many questions, except how [the strike] will impact programming or schedule,” he said. “We have an iconic venue. People will be there to see the new shows. We will still have a lot of talent there.”

Disruption from the strike aside, the continued weakness of the overall ad market is a reality that all sellers are facing. “We see the overall stress in the market,” Fox’s Marianne Gambelli said. Rather than add streaming subsidiary Tubi to the NewFronts, Fox wanted to make her a mainstay of the main front. “Tubi is at the heart of the company,” said Gambelli. “We don’t just throw it in.”

Similarly, other streaming providers like NBCU’s Peacock will take up space in the main section. Steinlauf said Max — as HBO Max will be called starting May 23 — will be the focus of his pitch. “It’s the highest priority” of anything in his portfolio, he said. While HBO Max under previous owners AT&T took a cautious approach to advertising around HBO Originals, the streaming service began selling ads ahead of this season in February. Max will run pre-roll ads ahead of typical Sunday night series like The Idol, an upcoming show from Euphoria creator Sam Levinson. Mercedes is among the advertisers occupying spots in this pre-roll, Steinlauf said.

Ferro also this week echoed Disney CEO Bob Iger’s comments about the company’s plan to focus on ad-supported streaming. Disney, which launched an ad-supported version of Disney+ last December, plans to combine Hulu and Disney+ content into a single app by the end of the year. About 40% of the company’s ad inventory is addressable, Ferro said, meaning buyers can achieve much broader targeting than traditional linear ads, adding 1,000 new advertisers last quarter.

One company that is unaffected by the WGA situation due to its unique DNA is TelevisaUnivision. Donna Speciale, Turner’s former longtime advertising sales manager, who held a similar position at Univision before its merger with Televisa in 2022, noted that the company’s production base in Mexico and focus on sports and news programming protect it from picket fears. The company’s presence in Basketball City, the East River location near South Street Seaport where Disney held its 2022 presentation, will underscore the resilience of the Hispanic advertising market. Privately held TelevisaUnivision has reported single-digit increases in ad sales in recent quarters, while many other companies, including Big Tech, have reported declines. “Historically, Hispanic investments were the first to be cut in a volatile market,” she said, “and now the opposite is happening.”