It’s about this time of year that an avalanche of new TV series begin to be talked about in the US. This is mostly the preparation for pilots and the fall prime-time lineups, built around the industry’s upfront events, when first broadcast networks, then cable networks, tell the press and advertisers, what they are up to this year and try to pre-sell as much of it as they can.
This will be vital to the industry this year, as around $15 billion changes hands, some 25% of US TV advertising commitments, in the space of around two weeks. No wonder the networks prepare for it like crazy. It is especially important after a bad year, which 2009 clearly was.
But this year is even more important because it is the end of several eras. Lost, Prison Break and ’24’ are ending. Heroes has had a falling audience and has been dropped, and House is beginning to try too hard to make each series different from the last. American Idol is likely to play to half the audience this year that it captured last year as it shuffles personnel.
Both types of networks quite simply no longer have enough of the right content, and this is why over the course of the last week there have been a bewildering number of new Series highlighted in the press. They must replace most of the top earners, and yet the US TV viewers’ appetite is jaded with TV Series that never end.
This process of recreating what the public wants each year is enormously expensive. The networks promise studios vast sums of money for the pilots, and $millions change hands even for a single pilot. Some years, and this will be one of them, as many as 30 or so TV series can be pushed out, and maybe as few as 4 or 5 will survive their first season. The studios stand to lose money if their work is frowned upon by the public or the networks, and the networks stand to lose money if not enough people view the work they commit to.
The New York Times ran a piece this week saying that the number of network pilots rose this season for the third year in a row, and that this is enough to hurt the first-quarter margins for the networks’ parent companies. This includes cable networks owned by companies such as Viacom and Time Warner.
The Networks need hits to keep the advertisers happy and many of their contracts with advertisers rely on minimum audience figures for a TV channel or a time of day. It is not just the commissioning of new material that is expensive, and unpredictable, but the running order – in other words the process of which program follows the most popular programs, hence retaining a chunk of their viewing audience at their start. All this is all thrown out of kilter. If your program previously followed Lost, it would begin with maybe 12.4 million bemused viewers, thinking too deeply about the Lost plot twists and turns to remember to change their channel, and you inherit them, and keep as many as you can interest.
But if there IS no Lost, then what are you inheriting them from? A new unproven program. In such a market, reputations and market share are made and lost and everyone promises to show no repeats. This effects the destination of $billions, as we said.
However this week the smart money is on Google TV being launched at Google I/O 2010, which begins later today, and sometime in June Apple is expected to launch its own third attack on the TV market (after two versions of Apple TV), dubbed by many as iTunes TV, and expected to involve its own streaming TV channels coming out of iTunes servers, instead of downloads.
The Upfront negotiations are difficult to interpret these days. The networks say whether or not their price per thousand people reached, has gone up or down, but never mention how much inventory they have sold. Sometimes they say we have this many $billions spoken for, but then it turns out that this commitment also included much of their own web site internet advertising, offered as inducements.
But it is now only a matter of time before internet only video advertising will start to have its own Upfront, and the results of this particular season, likely to be disastrous to at least one of the major Broadcasters out of NBC, Fox, CBS and ABC and to more than one cable network, may well point to that day being closer than we think.
Given the imminence of the Google TV launch, and the way that Google initiatives, such as the Nexus One smartphone, have been seen as ‘missteps’ based on marketing miscalculations, most Google watchers are predicting little or no effect from Google TV.
But in a war with Apple for the future of mobile device advertising, neither one is going to leave the TV market untouched, and after all the posturing that will come in the next few weeks on the Upfront, perhaps this will be the last glitzy Upfront, at the end of what has been the golden age of TV. Google TV and iTunes TV are still barely more than rumors. When they are real and have had a year to settle into their stride, advertisers will be holding back budget chunks to spend with at least one of them and there will be a passel of rival networks on the internet to distract advertisers.