Future of TV Briefing: How TV and streaming companies’ advertising businesses fared in Q1 2024

As this year’s annual upfront advertising negotiations get underway, the traditional TV ad market is still in recovery mode, while the streaming ad market remains in growth mode but still has catching up to do, according to TV and streaming companies’ latest quarterly earnings reports for the first three months of 2024.

Here’s a quick rundown of how companies’ ad revenues for the first quarter of 2024 compared to Q1 2023. Disney and Netflix do not appear on the list because neither company reports its respective ad revenue.

• AMC Networks: -13% change in ad revenue year over year
• Fox: -34%
• Fubo: +21%
• NBCUniversal: Flat
• Paramount: +17%
• Roku (platform revenue, which primarily consists of ad revenue): +19%
• TelevisaUnivision (U.S.): Flat
• Warner Bros. Discovery: -8%
• Vizio (platform revenue, which primarily consists of ad revenue): +27%

To summarize the list, companies whose ad businesses are primarily reliant on traditional TV had a tough quarter, whereas those oriented around streaming turned in a positive period. Not exactly a shock, but still. And yes, Fox’s and Paramount’s respective ad revenue decline and gain were affected by the former having the Super Bowl last year and the latter having it this year. But that’s kinda just how things go in the traditional TV business (and why companies pay billions for NFL rights).

But now let’s look at companies’ raw Q1 2024 ad revenues, and this time we’ll organize the list by revenue amount.

• Paramount: $3.1 billion
• Warner Bros. Discovery: $2.2 billion
• NBCUniversal (U.S.): $2.0 billion
• Fox: $1.2 billion
• Roku (platform revenue, which primarily consists of ad revenue): $754.9 million
• TelevisaUnivision (U.S.): $399 million
• Vizio (platform revenue, which primarily consists of ad revenue): $159.6 million
• AMC Networks: $140 million
• Fubo: $27.5 million

Probably also unsurprising that the traditional TV network owners largely outsold the streaming companies, but still notable. That’s true inside the traditional TV network owners, too.

Paramount’s streaming ad revenue increased by 31% year over year, but the segment represented only 17% of total ad revenue. WBD experienced a similar dynamic but to a greater degree. Max’s parent company saw its streaming ad revenue rise by 70% year over year, but that revenue just accounted for 8% of the company’s total ad revenue.

The story appeared to be the same at the other major TV network owners.

“Growth in [streaming ad revenue] was offset by some softness in our linear network,” said TelevisaUnivision CFO Carlos Ferreiro during the company’s quarterly earnings call.

NBCUniversal parent company Comcast doesn’t break out streaming versus traditional TV ad revenues. But during the company’s quarterly earnings call, Comcast CFO said the company saw “strong advertising growth at Peacock, offset by lower advertising revenue at our linear networks.”

Disney also seemed to experience the linear vs. streaming ad dynamic. Again, the company doesn’t break out ad revenue, but in its latest quarterly earnings report, Disney declared a decline in U.S. traditional TV ad revenue “attributable to a decrease in impressions reflecting lower average viewership, partially offset by higher rates.” By contrast, its streaming ad business saw an increase in ad revenue “due to higher impressions, partially offset by lower rates,” per the earnings report.

Also notable is how Roku and Vizio outdid AMC Networks, which as a general entertainment cable TV network group appears representative of traditional TV’s middle class. WBD would be another general entertainment cable TV network group, except its ownership of major sports rights — NBA (for now), March Madness, MLB, etc. — helps to level up its ad business. That also helps to explain why sports figures so heavily into the upfront market — and why streaming companies like Roku and Amazon are nabbing up sports rights.

As Disney CFO Hugh Johnston said during the company’s latest earnings call in response to a question about its streaming ad business, “Generally speaking, the advertising market is pretty healthy right now as we head into the upfronts. Certainly, live and sports are playing out very well.”

What we’ve heard

“We do a lot of sports-specific upfronts [deals]. Sports has its own rhythm. We’re advising our clients to buy sports in the upfront this year because we think there is going to be a lot more demand and it will be difficult to satisfy all the different players.”

— TV network executive

Numbers to know

$2.8 billion: How much ESPN will reportedly pay per year to retain rights to the NBA’s top-tier package of games.

What we’ve covered

Snap eyes growth as TikTok faces uncertain future in the U.S.:

• Snap has been trying to expand its advertiser base.
• Agency execs have not heard from TikTok-rival platforms regarding that platform’s potential ban.

Read more about Snap here.

TikTok moves toward ‘performance automation vision’ with latest machine learning ad tools:

• TikTok is testing new tools to automate the creation of campaign creative.
• The platform’s predictive AI and machine learning tech will select the best creative asset for advertisers to run.

Read more about TikTok here.

What we’re reading

TV networks’ new audience pitch:

Traditional TV audiences are getting older and older, but traditional TV ad sellers would rather not talk about that and focus on their audiences’ propensity for making purchases, according to The Wall Street Journal.

Hollywood’s AI licensing talks:

Alphabet and Meta have discussed licensing film-and-TV studios’ programming to train their respective video-generating AI models, according to Bloomberg.

ESPN licenses college football games to Warner Bros. Discovery:

WBD may be on the verge of losing rights to NBA games (or may already have by the time this publishes), but the owner of TBS and TNT has picked up a couple college football playoff games from ESPN, according to CNBC.

Diverse audiences dominate streaming viewership:

Women and people of color accounted for significant shares of the audiences for top streaming films in 2023, but their respective representation in the production of films continues to lag, according to Deadline.