The NewFronts Are All About TV, Media Misrepresents Netflix’s Troubles

1. The NewFronts Are All About TV

Remember when the NewFronts were all about MCNs? (Do you even remember what that acronym stands for without Googling it? Multi-channel network. And yes, I had to Google it too.)

That was eons ago, and this year’s NewFronts are all about TV, or CTV to be exact.

As in not once have I heard anyone talk about “publishers” or “creators.”

It’s all networks, channels and studios.

Big screens, not small ones.

And even a smattering of actual celebrities.

Why It Matters

For a whole variety of reasons, short form digital content never really took off. At least not the way many people—Jeffrey Katzenberg in particular—thought it would.

Streaming TV, on the other hand, really took off, what with eight multibillion dollar streaming services and a wide array of FASTs.

The FASTs were where the real action was this week though, as Peacock, VIZIO, Tubi, Amazon, Samsung, Roku and LG (in that order) all showed off their offerings in a manner that you would be hard-pressed to distinguish from the Upfronts.

Highlights included original programming, more curated linear channels, better interfaces, even a shoppable ad format from Roku. (Jennifer Aniston’s Sweater lives!)

There were also announcements from the various OEM players around more inventive ways to use their proprietary ACR data to make it easier for brands to buy and plan across linear and streaming.

Because if you had to boil down the single key takeaway from this year’s NewFronts and Upfronts it is that we are in a period where most viewers are watching both linear and streaming, and everyone in the greater ecosystem is going to have to deal with that for the foreseeable future.

To complicate that bit even further, there are some viewers who mostly watch streaming, some who mostly watch linear and some whose viewing is more evenly split. Which means that media plans will need to be calibrated to reach all three audiences and that “incremental reach” which right now mostly refers to CTV will also be a tactic used on linear as brands seek to reach that “mostly streaming” demo.

Finally, there is a growing appreciation of the value of FASTs. As the first of our two upcoming (June 2022) special reports will discuss, the initial reaction to the FASTs was similar to the initial reaction to late 1970s cable: it’s just a bunch of reruns and old movies, why would anyone want to watch that?

But clearly many people did, and like cable TV, the FASTs rapidly evolved, adding in innovations like linear channels and, more recently, original programming. 

They’ve also become an advertiser’s best friend, providing a way to reach people who are otherwise not easily reached on TV, along with more innovative ad units and (most importantly) a whole host of ACR-based data that allows advertisers to target and measure across linear and streaming from the same household.

What You Need To Do About It

If you’re an ad or media buying agency and you have not seen any of the NewFronts, the IAB will have them all online here. 

If you are confused about what this whole new world means because you’ve spent your whole career in programmatic digital, check out TVREV’s library of Special Reports which are designed to explain the complex TV ecosystem…and vice versa.

If you are one of the big, big streaming services, pay attention to the FASTs. If you are going to compete in much of the world—athose countries where few people have disposable income to spend on subscription TV of any sort—then you are going to have to go in with a product that incorporates all three business models: FAST, SAVOD (subscription ad-supported) and SVOD AF (subscription ad-free). Your goal being to keep most of the audience on the two ad-supported models while using the FAST to funnel viewers into the subscription models.

If you’re in the advertising industry, no it’s not you. The line between the Upfronts and the NewFronts has indeed become incredibly blurry.

If you’re in the television industry, FAST owners in particular, you seem to be on the right path in terms of the type of programming you’re developing: home, food and lifestyle shows, the sorts of evergreen programming you can own the IP to, the sorts of shows that blend well with advertising. Well done.

2. Media Misrepresents Netflix’s Troubles

It was bad enough that Wall Street jumped all over Netflix when the company announced that it lost 0.09% of its subscriber base last quarter, sending its stock down by as much as 50% or more.

But now the mainstream and tech press is slagging Netflix too, heralding “massive” subscriber losses, layoffs and (no doubt) blood, frogs, hail, boils and locusts.

Only none of it is true.

In no universe is a loss of less than one-tenth of one percent of your subscriber base “massive” — even if you factor in the projected two million subscriber loss, which would bump that total to just under one percent.

Why It Matters

There seems to be no small amount of glee coming from both mainstream and Silicon Valley media as to Netflix’s stumbles.

Part of that is general glee at taking down any company that was previously a media darling—editors know that these sorts of stories generate a whole lot of clicks.

Part is a specific glee in taking down the television industry, which many media types feel is full of unserious and overcompensated hacks. (Until they get an offer, that is.)

So there’s that, and then there’s a massive lack of understanding as to how the television industry works, especially from Wall Street. (Roku in particular seems to baffle them.)

But as these false narratives spread, the entire industry is affected, as investors start to believe all the hype and decide that the entire streaming industry is falling apart and that Netflix is but the first domino.

As explained last week, none of Netflix’s issues are surprising: at some point it was going to hit a wall in terms of people who wanted to pay $15/month for a streaming TV service, regardless of how good that service was. At some point Netflis was going to realize that few people in places like Africa and Central America have the disposable income needed to pay for an ad-free subscription TV service or even an ad-supported one.  When you roll out over 150 new series a year, of course the vast majority of them are going to suck and people are going to notice that most of your shows suck.

And if you drop every show in a series at once, it’s going to be more of a challenge to market that series than it would be if you dropped a new episode weekly.

None of that is rocket science.

What You Need To Do About It

If you’re Wall Street, learn about how the TV industry actually works. (We do seminars if you’re interested.)

If you’re covering Netflix for a big news organization or tech publication, maybe look at how the trade press is treating the story to see what “massive” really means. (That or a math class.).

If you’re one of the other big streaming services, time to get your PR teams into gear and explain why you’re different than Netflix.

If you’re reading this… don’t believe the hype. Streaming—and Netflix—are alive and well.