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Advertisers haven’t exactly been falling all over themselves to get in on this year’s broadcast upfronts. According to a new analysis out this morning from London-based ZenithOptimedia broadcaster networks are likely to see a 2 percent dip in ad revenue this year, even as cable networks are expected to post a 7 percent gain in bookings. That’s in line with what other forecasters have predicted as well.
The reason for the dip is straightforward: declining live viewing, especially during prime time. The answer would seem equally straightforward: lure more live viewers with better programming or more must-watch-live content such as sports. More live sports would mean more stratospheric licensing fees, however, and if making “better” programs were that straightforward the networks would be doing it already.
Instead, the broadcasters are likely to double down on demanding higher retransmission fees from cable and satellite providers as they try to make up the lost advertising revenue. That likely means more tense negotiations, more blackouts, and more calls on Congress and the FCC to “do something” about the retrans rules.
It also raises the stakes for the broadcasters in their battle with Aereo, particularly with cable operators eyeing Aereo like a get-out-of-jail free card in the retrans wars.