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Future of TV Briefing: The market for TV and streaming shows is in a correction period

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This week’s Future of TV Briefing recaps the conversations from last week’s Digiday Future of TV Programming Forum, during which production and development executives discussed the state of the programming market amid the economic downturn.

  • Market watch
  • The push-pull of panel-based measurement
  • Election Night at NBC News
  • Disney’s cost-cutting, Netflix’s live debut, Hollywood’s potential writers strike and more

Market watch

The key hits:

  • TV and streaming show buyers are cutting their programming budgets.
  • Production budgets have become an earlier part of the development process.
  • Buyers are prioritizing buzzy shows with big-name talent attached.

The pendulum of the TV and streaming programming market has swung wildly over the past few years. There was the frenzy of the early streaming wars followed by the pandemic-induced production hiatus, the race back to set and the resulting production backlog. 

Now the pendulum is in a downswing as show buyers and show makers seek to rein in costs and safeguard programming bets amid the economic downturn. 

TV and streaming show buyers including Disney, Netflix and Warner Bros. Discovery are pulling back their programming budgets. Meanwhile, production costs have risen with inflation, interest rates, supply-chain challenges and increased demand for cast and crew members.

During the Digiday Future of TV Programming Forum on Nov. 10, production and development executives from Magical Elves, Project X Entertainment and Telemundo assessed the state of the programming market and discussed how they are contending with the economic conditions.

“I do believe it’s a correction in the market,” said Paul Neinstein, co-CEO of production company Project X Entertainment, which has a portfolio that include movie “Scream” and upcoming Netflix show “The Night Agent.” “But I do think it’ll come back. That’s my two cents.”

“The market is definitely very tight right now. A lot of decisions are being driven by costs. There’s consolidation happening across the board in our business. So we’re definitely seeing less buys,” said Jo Sharon, co-CEO of production company Magical Elves, which produces “Nailed It!” for Netflix and “Top Chef” for NBCUniversal’s Bravo.

Speaking from the buying perspective as head of development and production for NBCUniversal Telemundo Enterprises’s Hispanic streaming group, Danny Villa acknowledged the “belt-tightening happening across the board.” 

But he also pointed out that show buyers’ wallets remain open. For example, Telemundo’s Tplus streaming service plans to premiere the first original shows this week as a part of a four-series original programming slate that will double to eight or nine series next year with per-episode budgets ranging from the six to seven figures akin to the budgets of shows NBCUniversal airs on its traditional TV networks and Peacock streaming service, according to Villa.

“I wouldn’t say that our budgets are being affected in a way that concerns me on the creative side,” he said.

Nonetheless, budgets are a concern in the general market. Typically, setting one for a show would be a secondary step in its production process, but now it’s an early part of the development process. 

“We very much are talking about money and cost and what the budget is as part of the development process, which is not how it used to be,” said Sharon.

Moreover, budgets are being affected in a way that’s pressing producers to get creative with how shows are being produced and packaged for TV and streaming show buyers. Additionally, given the budgetary pressures, TV and streaming show buyers are seeking to make even safer bets on shows, prioritizing projects that have big-name talent attached and are likely to attract a lot of buzz among audiences.

“If you can get a great cast who people want to see early on into a package before you go out [to pitch a show to buyers], it gives you the ability to play the market a little bit differently,” said Neinstein. “Where it’s difficult is a lot of talent representatives don’t want to attach their clients until something is set up. But it’s much easier to get a bigger deal and real traction if you can get talent in early.”

“The number-one thing everyone is saying they want is ‘buzzy.’ That’s the word of the last two years,” said Sharon, whose company is no stranger to producing buzzy programs. 

But what makes a project that has yet to go into production, let alone premiere to audiences, qualify as buzzy?

“It’s a very good question,” she said. “Welcome to the conundrum of the market right now.”

What we’ve heard

“I don’t have any reports yet on how it’s delivering other than it is delivering.”

Anheuser-Busch head of media Juliana Wurzburger on Netflix’s ad-supported performance so far

The push-pull of panel-based measurement

Yep, panels are the past and present of TV ad measurement. They’re also set to be a fixture in its future.

Look no further than Tuesday’s announcement that measurement provider iSpot.tv will incorporate Tvision’s panel-based measurements as part of the latter’s $16 million funding round led by the former.

Of course, that announcement came days after news broke that the predominant panel-based measurement provider Nielsen has yet to secure the confidence of the Media Rating Council that the company has plugged the holes in its measurement panel. 

The two announcements evince both the appeal and the problem with panel-based measurement. On the plus side, panels provide a means of gathering a deeper set of insights from its participants. On the down side, they risk not being an accurate representation of the broader TV viewing audience.

The plus-minus of measurement panels is why industry organizations the Association of National Advertisers and the VAB have been working to set up their own measurement panels. They aim to provide their own panels, if only as a check against the various panels proliferating in the marketplace.

The ANA opened an RFP process in February and received responses from eight companies. “We’re currently evaluating the responses to the RFP process, and that’s about as far as I can go at the moment on that,”ANA evp of measurement Jackson Bazley said in an interview last month.

The VAB is working to put together “an industry calibration panel that could be accessed by any qualified measurement company,” said VAB CEO Sean Cunningham said in a separate interview last month. Rather than an attempt to recreate and rival Nielsen’s panel, the VAB’s aim with the audience calibration panel is for it to serve as a benchmark in order to help ad buyers and sellers identify and address any discrepancies among measurement providers.

Numbers to know

$7.7 billion: How much revenue subscription-based streaming services generated in the U.S. in the third quarter of 2022.

981,674: Number of subscribers the top seven U.S. pay-TV providers lost in the third quarter of 2022.

37 million: Number of people in the U.S. who have used an ad-supported streaming service.

$10 billion: How much ad revenue TikTok expects to generate in 2022, down from its previous estimate of $12 billion.

80 million: Number of paid subscribers that YouTube has.

25.4 million: Number of people who watched traditional TV networks’ primetime election coverage, a nearly 30% drop from 2018.

Election Night at NBC News

Last week I dropped by 30 Rockefeller Center on the night of Nov. 8 to get a look at NBC News’ election night operation, including stops at its NBC News Now studio and control room as well as a tour of its digital newsroom and time with its TikTok team. To see what NBC News’s Election Night streaming and digital operation looked like, check out the video above.

What we’ve covered

Why Anheuser-Busch prefers PMPs to programmatic guaranteed deals for streaming ads:

  • The beer giant prefers PMPs for the improved ability to manage ads’ frequency across streaming services.
  • Anehuser-Busch’s Juliana Wurzburger also discussed being the first beer advertiser on Netflix during the Digiday Future of TV Advertising Forum.

Read more about Anheuser-Busch’s programmatic streaming ad strategy here.

Horizon Media and Magnite ink SPO deal to consolidate buys, focus on CTV:

  • Magnite will become the preferred supply-side platform for Horizon Media’s private marketplace and programmatic guaranteed CTV deals.
  • The media agency and ad tech firm aim to provide advertisers with greater control over and transparency into where their streaming ads run.

Read more about Horizon Media’s and Magnite’s CTV focus here.

How Bleacher Report is using animation to differentiate its World Cup coverage:

  • B/R will air a special episode of its animated series “The Champions” as well as a new, shorter-format show.
  • The B/R Football account sees animated content attract more shares, likes and comments than other content it posts.

Read more about Bleacher Report’s animated videos here.

Vox’s short-form video strategy faces TikTok’s monetization issue, but fulfills publisher’s ‘civic duty’:

  • After being dormant on TikTok for more than a year, Vox started posting to the platform against this month.
  • The publisher has yet to form a dedicated TikTok team in light of TikTok’s nascent monetization program.

Read more about Vox’s short-form video strategy here.

YouTube highlights its shoppable videos with holiday gift guide festival:

  • YouTube is running a 10-day-long shopping event featuring YouTube creators.
  • Ulta Beauty, Tula and R.E.M. Beauty are among the participating brands.

Read more about YouTube’s shoppable videos here.

What we’re reading

Disney’s cost-cutting:
Disney will pause hiring and lay off some employees as the company’s streaming losses increase while its TV ad revenue shrunk in the latest quarter, according to CNBC.

Netflix’s live debut:
Netflix will air a live broadcast of a Chris Rock standup special next year, which could lead the streamer to invest in more live programming in the future, according to Variety.

Hollywood’s potential writers strike:
Members of the Writers Guild may strike on May 1 as they push for improved compensation at a time when film and TV studios are seeking to rein in spending, according to Puck.

Nielsen’s accreditation status:
The Media Rating Council has voted to extend the suspension of Nielsen’s accreditation as the measurement giant addresses its counting shortcomings and prepares its updated measurement system, according to Ad Age.

Studios’ vaccine mandates:
Disney, Netflix and Paramount are relaxing their requirements that productions’ cast and crew members be vaccinated against COVID-19, according to The Hollywood Reporter.

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