Advertisers resist US TV networks' glitzy launches

Behind the glitzy launches of US television's autumn schedules this week, a nervous question is being asked: how much longer will this annual beauty pageant matter to the advertising executives in the audience?

This is traditionally the week when some $9bn (£5bn) of ad spending is carved out among the television networks, but two of the country's biggest advertisers, Coca-Cola and Johnson & Johnson, have indicated they will sit it out for now.

Whereas in previous years about 80 per cent of prime-time advertising slots would be filled in the frenetic days after these presentations, few pundits think that figure will be reached this time. The consensus view is that the total ad revenues from this week of "upfronts" will fall below last year's $9.1bn.

The reason: as the internet increases in importance as an alternative entertainment source to television, so it is increasing as an alternative place to advertise, too.

On the surface, the task for the networks is the same as ever. Pile on the razzamatazz and give an equally hard sell to new shows and old favourites. NBC has been trying to create a buzz over Studio 60 on the Sunset Strip, a new vehicle for the ex-Friends star Matthew Perry. ABC insists Grey's Anatomy can wrest viewers from CBS's CSI: Crime Scene Investigation in a bold head-to-head battle. Tomorrow Fox will trumpet its continued domination of the key 18- to 45-year-old demographic with shows such as American Idol.

But the upfronts are different this year, and the networks can feel their clout with advertisers declining. Johnson & Johnson, whose consumer brands include Johnson's baby powder and Neutrogena shampoo, would not previously have risked waiting to buy its television ads in the last-minute market. But prices in this so-called scatter market have weakened. This is in part because one in eight households in the US now has a digital video recorder, such as a TiVo machine, and can skip the commercials. And partly it is because of all the opportunities for switching advertising dollars to the internet. J&J insiders say the company could allocate up to 20 per cent of its advertising budget to non-traditional media.

The networks are no longer talking up the scarcity of commercial breaks in an effort to inflate advertising rates. Instead, they are talking up a proliferation of new opportunities to advertise alongside hit shows. They are groping for an internet strategy, trying to hold on to as much share of the ad cake as possible.

NBC - the least watched of the four main networks - has gone furthest so far this week, promising to launch two new "channels" on the internet, including one where shows such as ER and the US version of The Office might be premiered before they are shown on television. There will also be specially created mini-episodes of some shows. With 70 per cent of US homes predicted to have broadband by the end of this year, NBC is increasingly putting video ads on its sites as well as traditional, but less lucrative, pop-ups and banner ads.

Randy Falco, chief operating officer of NBC Universal TV, said the company was responding to predictions that upfront sales of autumn television ads would be slightly down this year. "Everybody is holding back just a little bit of money," he said. "When good digital ideas come in, they want to be able to participate."

The Disney-owned ABC, which has the highly bankable shows Desperate Housewives, Lost and Grey's Anatomy, is already selling episodes direct to viewers over iTunes, to try to reduce its need for advertising at all. But it is also experimenting by making the shows available online, with technology that prevents viewers skipping adverts.

All eyes now are on the multi-media plans that might be discussed by Fox, the network owned by Rupert Murdoch's News Corp, which presents its schedule today. Its parent company has launched a sister network, called MyNetworkTV, which borrows branding from the MySpace community website that News Corp bought last year. Mr Murdoch is searching for ways to attract advertising and other revenues to a site used by 75 million mainly young people. So far, he has unveiled plans to sell episodes of Fox shows such as 24 on MySpace, and stars from MyNetworkTV shows will be given their own MySpace pages.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
News
people
News
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want it for the fitness tech, or for the style
News
i100
News
Astronauts could be kept asleep for days or even weeks
scienceScientists are looking for a way to keep astronauts in a sleeplike state for days or weeks
Sport
Fabian Delph celebrates his goal
footballChristian Benteke and Fabian Delph turn semi-final after Liverpool goal
Life and Style
Model wears: top £29.50, leggings £25, jacket £29.50, bag £25, all marksandspencer.com
fashion
News
people
Arts and Entertainment
The new-look Top of the Pops could see Fearne Cotton returns as a host alongside Dermot O'Leary
music
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace