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November 1, 2020

TV’S 2020-21 PRIMETIME UPFRONT: SUCCESS DEPENDS UPON PERSPECTIVE

Media Dynamics, Inc. releases preliminary estimates in advance of their annual upfront and CPM-CPP reports

The national TV networks completed their 2020-21 primetime upfront sales just prior to the beginning of the fourth quarter, much later than usual due to the disruptive impact of the COVID pandemic. Many of these negotiations were long, drawn-out affairs because of uncertainties regarding program content, anticipated viewing levels, the buyers’ desire for more flexibility on cancellation rights, and other factors not normally associated with past upfronts. When the dust finally settled, the sellers obtained much smaller CPM hikes than they would have liked, ranging between 2-4%,  with "premium" primetime fare usually on the high end of the scale.

We estimate that 2020-21 upfront buys totaled $18.6 billion for the broadcast networks and cable channels, which was a significant decline of almost 15% compared to the totals for the previous upfront as originally negotiated. However, almost $3 billion of the 2019-20 upfront buys were cancelled due to the worsening economic conditions caused by COVID, which were felt most heavily in the second quarter of 2020, but also extended into the third quarter.

“Once we adjusted our upfront ad spend figures to account for these cancellations, the sellers did quite well,” commented Ed Papazian, President of Media Dynamics, Inc. As shown in the attached table, 2020-21 upfront ad revenues for the broadcast networks and cable channels were down by only 2% compared to the amounts that advertisers actually spent—less cancellations—for the 2019-20 upfront.




It should be noted, however, that because many buyers negotiated more favorable cancellation clauses than had previously been allowed, if a second wave of COVID-19 disruption hits during the fall and winter, major portions of planned upfront spending may again be cancelled.

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