Top 6 Takeaways from the 2022 Network Upfronts
By Greg Kahn
Emerging Tech Exchange
Founder & CEO
Last week marked the television Upfronts, an annual event where networks flash their upcoming programming in the hopes of attracting new advertising partners. The Upfronts offer a preview to the public about what they should be excited about this fall and where they will be able to watch watercooler shows— which is no longer a simple question. We can debate whether an event like this is still relevant, as the landscape with new players and the advent of streaming and subscription packages has upended the traditional network television business and thus how brands approach advertising.
How networks choose to spend their time in the limelight is telling. In a world with splintered attention, they all need to prove it. Don’t expect the number of invitees at upfronts to remain stagnant. The roster had a plus-one this year in YouTube.
Networks are in the midst of an anxiety-riddled conundrum — who’s watching, why, and how can we tell? As “networks” take new shape and consumers find new ways to spend their time, the perennial darlings at the Upfronts look like the hunted and not the hunter. Something is abundantly clear — comfort is void in 2022. This isn’t your grandfather’s regularly-scheduled TV programming.
On the advertising front, brands are looking for more ways to reach consumers across a variety of platforms and mediums, often sliced and diced amongst different sub-audiences and niche communities. The ad dollar pool has to be allocated among traditional network and cable TV players, emerging streaming services, social platforms like TikTok and Instagram, audio and outdoor, gaming publishers and yes...even the metaverse.
As news from this week evolved, here are 6 things that stood out that will have a big impact on the content landscape and in advertising over the next year.
1. The landscape has (officially) changed
This was the first Upfronts in person in 3 years. That time has seen a big shift in the industry, from mergers and consolidation to the advent of streaming services and new entrants like Peacock and Paramount+ (or failed ones like CNN+). This year’s Upfronts featured presentations from established stalwarts like Comcast, Disney, Fox, and Paramount, but also YouTube. While they didn't offer formal presentations, conversations about Netflix, Amazon and other upstarts were abound. And new this year, instead of the focus being solely on new programming rolling out this fall, media companies spent a lot time talking about new advertising opportunities, models, and formats within streaming services and even in the metaverse. Nielsen reports that brand advertisers are now allocating close to 50% of their video budgets to streaming, up from 10% pre-pandemic — that’s a huge deal.
2. YouTube declares itself “Main Stream”
YouTube crashed the Upfronts party with an extravagant Brandcast, touting its 230M viewers in 2021 and parading out some of its high-profile talent including Mr. Beast, former NASA engineer Mark Rober, singer-songwriter Nija, beauty guru Patrick Starr, and tech reviewer Marques Brownlee. Variety’s Todd Spangler noted, "If MrBeast’s YouTube channel were its own streaming service, it would have more subscribers than each of the next most popular ad-supported services: Disney’s Hulu, HBO Max and Paramount+.” Nielsen reported YouTube has 50% of ad-supported watch time on TV screens via streaming services, while a YouTube commissioned study of 14 large brand advertisers found that compared with linear TV, YouTube connected TV ads are on average 208% more affective at driving sales per impression.
3. Warner Bros. Discovery speaks for the first time
With merger between the two behemoths closing just last month, and following the tumultuous launch and quick shutdown of CNN+, all eyes were on Warner Bros. Discovery’s celebrity-studded Upfronts presentation at Madison Square Garden. The company made the bold statement that it should be considered a direct competitor to the big four broadcast networks, noting it had a larger audience in the adults 25-54 demo than any of them. However, the most anticipated, about the consolidation of the company’s two streaming services, and the future of CNN+, did not happen. The company said the two services would remain separate for now and that flagship CNN+ shows from Chris Wallace and Eva Longoria would move to HBO Max and CNN’s Sunday Night programming.
4. Netflix on the ropes
A number of companies took digs at Netflix during their Upfront presentations, further highlighting the company’s recent struggles with stalled subscriber growth and cancellations as well increased competition from new streaming services. Netflix continues to bleed content to competitors while the company has also been criticized for offering more quantity than quality in its programming and for raising prices (the highest in the industry now). Naturally, as the pandemic subsides, people are spending less time at home and thus are consuming less content. This has also had an effect on Netflix. And finally, the company’s guidance that it planned to combat account sharing has not been well received. It will be a challenging year ahead for Netflix and the company will be one to watch. Will Netflix need to acquire another content, adtech, gaming or digital community company to maintain its leadership position?
5. Competition for everything
Peacock and Paramount+ are among a number of new streaming services to emerge over the past couple of years, including Disney+ and Discovery+. These joined a market that already included Amazon’s Prime Video, Apple TV+, Netflix, YouTube TV, and Hulu, as well as an array of free streaming services such as Pluto TV, Tubi and Amazon’s Freevee. This increased competition is not just for eyeballs and new subscribers, but for content and advertising dollars. As established and emerging platforms try to differentiate, big money and resources will be spent on acquiring rights to live sports and entertainment — see Amazon’s NFL deal and Apple’s rumored DirectTV Sunday Ticket one — as well as content and talent from Hollywood and around the world. With these diversified offerings and platforms, advertisers will now have more places to put their money and test out what works and what doesn’t, to find that right mix to reach its audiences. This will mean leaner takes for the big, established players. It will be fun to watch.
6. New ad formats and inventory to tap into Metaverse
With more brands participating in the metaverse from an advertising and marketing standpoint, expect the media brands to follow suit. From exclusive content in the metaverse via popular platforms like Roblox to creating their own worlds with opportunities to reach audiences, this will be the single most interesting topic to watch this year in the media space. Sports and entertainment companies, as well as fashion brands, have gone all-in on the metaverse by offering immersive and exclusive experiences, live concerts, virtual goods, and creative activations. Traditional brands have followed suit by committing ad dollars and spending on trials and campaigns in virtual worlds. The big media companies don’t want to miss that boat. NBC Universal came out with a variety of new ad formats and products at the Upfronts, geared towards this new virtual and decentralized world, and I expect others will follow suit in the months ahead. The metaverse and Web3 should be big topics at upcoming advertising and marketing showcases like Cannes Lions and COLLISION Conference and for sure at next year’s Upfronts.
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Greg Kahn
Principal, GK Digital Ventures
Founder and CEO, Emerging Tech Exchange
