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InContext / An inside look at the business of digital content

Are the NewFronts still worth it for publishers?

May 9, 2019 | By Mark Glaser, Founder and Publisher – MediaShift @mediatwit

Certain terms like “new wave,” “new school,” and “online video” start to lose their meaning over time. The same seems to be true of the “NewFronts,” now in their eighth year in New York. The showcase for traditional and digital native publishers selling their video offerings to marketers has been split up into twice-per-year affairs (with a fall showcase in L.A.). Just 16 publishers presented in New York this year, down from 36 in 2017.

The idea of the TV Upfronts and NewFronts are to dazzle advertisers and get them to commit a chunk of their advertising to the publisher, though there is less scarcity online. Have the NewFronts made progress over the years? Most definitely. Has that progress meant there is no need for them anymore? Not quite.

What’s most interesting at this year’s shindig is that traditional players are pushing new acquisitions and initiatives, while the digital natives are trying to sound more traditional with ongoing series. This points to a convergence of purposes and the fact that online video, OTT, streaming video et al have commingled to the point of absurdity. This leaves marketers grasping at just what they’re buying and how they can track and optimize it all. And yet there’s still a place for publishers at the NewFronts as a showcase for offerings and to generate much needed buzz.

Platform domination

The biggest challenge for publishers, as always, is trying to stand out from dominant players like Hulu, YouTube, and even Twitter. And the dominant players just get more dominant. YouTube casts an immense shadow as the largest ad-supported video platform online. But, as Digiday’s Sahil Patel points out, YouTube users are spending 200 million hours per day watching YouTube on a TV, up from 100 million hours last October.

And Hulu hit $1.5 billion in ad revenues last year by offering a mix of legacy TV programming and original shows. During its NewFronts presentation, Hulu execs pointed out that they have 26 million paid subscribers, and a much younger audience than cable, at 31 years old vs. 53 years old. Plus, 80% of Hulu viewing takes place on a TV set, up 75% from last year. (And Hulu even sponsored Digiday’s coverage of the NewFronts.)

This puts many publishers in a bind because they have to sell their uniqueness to advertisers while also cutting deals with the platforms to expand reach.

“Mass reach is still a thing,” Mediahub’s Michael Piner told Digiday. “And there are certain partners that are being prioritized because they can achieve the mass reach of TV.”

What do publishers get?

So what do publishers get for their money and trouble at the NewFronts now? Well, the decrease in presenters means they do get more attention from attendees. And at least one publisher, Studio71, was touting its upfront ad sales.  The company has presented at the NewFronts from 2016 through this year’s edition. Studio71’s CEO Reza Izad told Digiday that 85% of their revenues each year came from upfront commitments. They boast 100 million unique viewers per month on YouTube and vet each piece of content on the network.

Still, many publishers such as Group Nine and Refinery29 decided to forgo the NewFronts for a private tour to increase intimacy – and likely save costs. The increased competition for digital video ads is partly to blame, and people are also paying more for services such as Netflix and HBO that don’t serve ads at all.

But it’s still hard to ignore the growth of digital video, especially if you sell video advertising in entertainment. The IAB’s Video Ad Spend Report surveyed marketers and found they would be spending $18 million on average this year on digital video ads, up 25% from last year, with the Media/Entertainment vertical up a whopping 75%. (And yes, that means studios are buying more ads on other media.)

Switching places

Meanwhile, notable presentations from Meredith and Conde Nast discussed new shows for their OTT services, and Meredith is also distributing them through its local TV stations. And as OTT moves into broadcast, cable network Viacom was showcasing content on its newly acquired PlutoTV OTT service. 

“Viacom is embracing digital inventory, and at the same time we see Condé and Meredith pushing themselves into the OTT universe,” Wavemaker’s Noah Mallin told AdAge. “They are starting to resemble each other more and more.”

As AdAge’s Jeanine Poggi’s so astutely points out, this is the year when the NewFronts actually looked a lot like the regular TV Upfronts, with the themes of brand safety, original programming, and scale. “This year more publishers spoke about renewing existing shows, creating long-form content akin to TV and positioning themselves as the new ‘primetime,'” Poggi wrote.

So where does that leave publishers and the IAB? Perhaps the time has come to ditch the NewFronts and merge them into the regular TV Upfronts. More importantly, publishers need to calculate carefully the benefits of a flashy program on stage at the NewFronts, and whether that still beats a private tour or other marketing outreach. Ultimately, it will take a new round of upstart video-centric publishers who want to make a splash to inject new energy into the NewFronts.

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