/// Do NewFronts Really Affect TV Pricing?

May 13, 2013  |  Media Week

Google’s Eric Schmidt may have told an audience full of media buyers that Web video had already replaced television last week, but the ad industry isn’t so sure the NewFronts are going to make that much difference when it comes to moving ad dollars. “They’re a distraction,” said Pivotal Research analyst Brian Wieser (formerly lead forecaster for Magna Global). “They’re a useful sideshow for developing relationships, but they don’t serve any other practical purpose.” The mechanics of the video business, Wieser said, haven’t changed at all. Clients don’t have to commit money in this upfront unless there’s a massive discount on already-cheap inventory “because there’s no scarcity.” Jason Krebs, president of sales/marketing at Blip, couldn’t disagree more strongly. “There is a high amount of scarcity for high-quality video,” he said. “Anybody who says there’s no scarcity is not paying attention and repeating the rhetoric.” Krebs says that the problem is extreme scarcity—there just aren’t as many pure-digital offerings out there that demonstrate the production value consumers are used to on linear cable or broadcast. “ House of Cards (on Netflix) is an anomaly, but not for long,” he said. To some extent, comparison between the NewFronts and the upfronts—or even between more than two or three NewFront presentations—is an apples-and-hand grenades proposition. Google and Hulu have radically different business models; Netflix is a name on everyone’s lips and it doesn’t even take advertising. But most industry execs agree that digital companies are going to have to create higher-quality, higher-profile shows if they’re going to take any share away from TV. “When The Walking Dead premieres, you wouldn’t miss it,” said Francois Lee, svp and group client director, MediaVest Worldwide , one of several agencies that called on video companies to up their games in an open letter last week. “It’s on the subway, it’s outside, it’s on networks, and with a lot of the digital content, you don’t see that level of promotion.” On television, production begins months in advance

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Do NewFronts Really Affect TV Pricing?

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