Every spring, all the major (and not-so-major) TV networks preview their upcoming lineups in an effort to entice advertisers to spend money “upfront”—buying in bulk at lower prices. The alternative for ad buyers is to wait for the year to play out, hoping to buy in the “scatter” market, which may have only smaller chunks of ads available at what might be higher prices.

Despite a broad shift in audiences from broadcast to cable-TV, the total amount of money raised by the two sectors remains about equal. Cable only recently took the lead:

The fact that broadcast can even still hang with cable is a sign of what I have written about before: Ad rates per viewer remain higher for the networks than for smaller cable competitors. Big ad buyers are willing to pay up for relatively larger audiences, even if those audience sizes aren’t nearly the same as 10 years ago. The Big Four networks raise, on average, about $2 billion each in upfront sales, a number that has been roughly steady even over the decade-long audience decline:

The biggest area of disruption is the Internet-centered NewFronts, where Google, Microsoft, Yahoo!, AOL, and Hulu will present their newest offerings in original TV shows. Last year the NewFronts raised about $1 billion—huge considering how new these players are in original programming. The number could easily top $2 billion in the near future, given the rapid growth in online video.

“It’s ridiculous how everybody is getting into original programming,” says Geetha Ranganathan, a media analyst at Bloomberg industries, pointing to both Yahoo and Microsoft, which announced new original content strategies this week. “Everybody in tech wants to get a foothold in the media space, and they are doing it through programming and original content.”

Ranganathan also reminds us that “the ad market for digital video is robust.” It’s probably no coincidence that the biggest digital properties—the so-called NewFront Founding Partners—are trying to take more of the spotlight for themselves this year, edging out their smaller digital competitors.

The correlation is only 35.9 percent (pdf) between upfront spending and growth in the total U.S. ad market, according to Credit Suisse. Upfronts are a good indicator of the health of the advertising industry but certainly not the definitive one. So if the upfront season ends up being soft, and the networks say their industry might still be doing fine, there could be some truth to that.

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