TV advertisers are changing the channel

Normally, this would be the time of year when the big broadcast networks gathered in New York City for the upfronts. They’d pitch their new shows to companies who would then spend billions of dollars buying TV advertising. There would be plenty of partying too. Needless to say, that’s not happening this year because of coronavirus.

Instead, the upfronts are going virtual.and Adweek reports a survey from industry watcher Advertiser Perceptions, showing ad spending will be down 33% compared to last year — a loss of almost $7 billion.

This could be brutal for broadcast television, which relies on selling commercial time to make money. Furthermore, the Wall Street Journal reports that companies including GM, PepsiCo and General Mills rushed to meet a May 1 deadline allowing them to back out of previously made ad commitments for later this year. The result could be a potential loss of up to $1.5 billion in ad revenue.

Advertising woes are just one of the challenges network television is facing. Most production is still stopped. TV specials made in isolation garnered some interest at first, but viewership numbers have dropped as those one-offs are no longer a novelty. In general, broadcast ratings were up in the early weeks of stay-at-home orders, but have since softened as viewers have increasingly switched to streaming services.