The annual mating dance between advertisers and the big broadcast networks — otherwise known as the Upfront — wraps up Thursday in New York.
For days, CBS, NBC, Fox and the like have been parading their new shows in front of media buyers, who in turn have been placing their bets on the new season by locking in ad time.
Come fall, viewers will have their pick of new dramas and comedies about time travel, a sensitive dog with a Rodney Dangerfield complex, a series based on "The Exorcist" and dozens of other attempts at a hit.
If history is any guide, most of the new shows will fail. And network audiences will continue to shrink.
But prime-time ad real estate will do what most real estate does: appreciate.
“It's one of the great ironies in television,” said Brian Sheehan, a professor of advertising at Syracuse University. “Television actually becomes more valuable, even as it becomes smaller."
Why? Because network TV is still the biggest—and most advertiser-friendly—game in town.
“One of the things you need to do is build awareness for any brand, and awareness is really a reach and frequency game which is what television is so good at,” Sheehan said.
Cable simply can't deliver the same mass audiences, and streaming services like Netflix and Amazon don't have traditional ads.
Based on estimates for last year's Upfront, the five broadcast networks brought in more than $8 billion in commitments for prime-time shows.
And while this year’s take is predicted to go to $9 billion, long-term the networks know they need to find a more workable business model.
“Stuffing more traditional 30-second and 15-second ads into increasingly larger commercial pods is not appealing to consumers,” said Tim Hanlon, managing director at FTI Consulting. “Especially when consumers are getting very comfortable watching things on demand in subscription environments that have no commercials.”
Some networks are offering advertisers the ability to blend ads right into their shows, or become sponsors.
And some big-name shows like “Empire” and “Saturday Night Live” are reducing the number of commercials they air.
But that probably won’t hurt their bottom lines. Scarcity has a way of making things even more valuable.