By now, we have all heard the ongoing saga of the Hollywood Writers Strike. For a quick recap of what that is, The Screen Actors Guild–American Federation of Television and Radio Artists (SAG-AFTRA) is the American labor union that represents a plethora of positions in the media industry from actors and editors to program hosts, singers, and almost every talent in between. The Writers Guild of America (WGA) went on strike on May 2nd after failing to reach an agreement with the Alliance of Motion Picture and Television Producers (AMPTP). As a domino effect, the actors’ union officially went on strike on July 14th and has now exceeded the 100-day mark (August 9, 2023) and is still going strong. The previous strike started in November of 2007 and only stretched 100 days into February of 2008.
How will this affect our clients? The biggest concern is linear TV. In recent talks with networks, we discovered that only one broadcast network is planning to air fresh scripted prime programming in the fourth quarter. With limited fresh programming created for broadcast or cable, more viewers may flee to on-demand and streaming alternatives, making brands and agencies consider budget shifts to other impactful video outlets like influencers and social media content creators. Streaming services like Netflix will also feel the implications, although not at the same level, given many of their shows are produced abroad. Hulu and Peacock rely heavily on broadcast and cable content, which will likely cause them to suffer as well. New content across the board will be hard to come by on the big screen in the next few months.
When asked about the current marketplace conditions, Rita Ferro, President of Disney’s Advertising Sales, said “It’s definitely a slower marketplace than it has been in years.” Traditionally, advertisers participate in national TV upfronts to lock in priority programming early and gain pricing efficiencies. Many brands and agencies have not committed to the same level of upfront budgets as they have in previous years. There are various reasons why they are hesitant, but it’s evident that the Writers Strike is playing a large role in some of those decisions. With declines in ratings and no fresh programming, agencies need to be more calculated in where they plan to invest ad-dollars for 2024.
As if the Writers Strike wasn’t enough, 2024 is also a presidential election year and political ad spending is expected to reach $11 billion (up from $8.9B in 2022) according to a Vivvix analysis, making it one of the fastest-growing advertising sectors. More than $200 million has already been spent to date. We will continue to monitor the video space during this time, and explore other cable alternatives, regardless of fresh programming or not, to capitalize on historic shifts in consumer viewership during heightened political times.
A few places where we can drive success early in 2024 for clients will be through live news, sports, and non-scripted prime programming. These areas continue to be the focus for ad dollars in this unpredictable landscape. Networks and production companies are reportedly gearing up to increase their reality television production as the strike continues. Netflix, Hulu, Amazon Prime, and Peacock all have upped their unscripted lineup, even prior to the strike. During this time, we encourage a daypart distribution that focuses on live programming for broadcast, sports, and cable primetime. Mark Marshall of NBC believes advertisers can’t hold back too much, stating “When we look ahead to the fourth quarter alone, we expect 17 auto launches, 16 studio releases, and 10 pharmaceutical releases.” Advertisers in these categories have always had to fight for their share of space, competing with tough competition in their categories. However, we do not recommend completely shifting away from a linear TV strategy.
As we consider the impact on our plans holistically, it is important to note that linear TV and streaming are only two sub-tactics in the overall video landscape. Knowing that video content is very impactful in moving the needle on key objectives such as awareness and sales, we will be balancing investment adjustments and making the most of a tough linear TV situation by:
- Keeping the audience’s holistic media consumption habits at the forefront of our efforts when developing investment recommendations or executing buys.
- Ensuring strong SOV in other spaces where our audiences are actively engaged in video content inclusive of streaming, TV, social, and online video.
- Exploring back-up plan options as high-visibility TV events get postponed or cancelled and leaning more on the “live” tentpoles where it is feasible and relevant to our audiences.
- Maintaining flexibility with investment strategies within the video space to minimize the impacts on audience reach, which could take shape in the form of favoring programmatic buys vs. direct partnerships with networks or investing in partnerships that include OTT/CTV elements in combination with linear options vs. an exclusive linear buy.
- Applying extra attentiveness over the next six to eight months to remain abreast on the TV, movie, and video landscape and developments to stay in front of potential pitfalls within the ongoing Hollywood standoff and remain agile with client investments.
