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UPFRONT 2026: THE CROWN JEWEL OF TV ADS · The Media Odyssey

• Evan Shapiro: [00:00:00] Just really quickly say, "This is the Media Odyssey." Mike Shields: This is the Media Odyssey podcast. Evan Shapiro: I'm- My heart's aflutter. Marion Ranchet: Welcome to the Media Odyssey Podcast. That is Evan Shapiro. Evan Shapiro: And that is Marion Ranchet. Marion Ranchet: You could have said this with a bit more oomph. No, but, let's do it. Evan Shapiro: You know what? Here's the thing. No, here's the thing. So we have a special guest on the episode today, and during the prep, you kvelled over his, which is Yiddish for you fawned over his voice in particular- Marion Ranchet: Okay... Evan Shapiro: In a way that you've never done for me. You've never told me, "I love your voice-" I think you said you love his voice. Is that what you said? Marion Ranchet: That's what I said, yes. Evan Shapiro: She's blushing. If you're only listening to this right now, Marion, I've made Marion blush, which is the first [00:01:00] time ever. Almost always it's the other way around. So why don't we just get right to our guest. It is Upfront week, as I said, or tried to say, and we have a very special guest, and I think you should introduce him since you have, you appreciate his voice so much. Marion Ranchet: People are gonna be wondering who the hell this guest is. Evan Shapiro: You are blushing. You are blushing. Marion Ranchet: I am. Evan Shapiro: It is a big buildup. Marion Ranchet: It's, I don't know why. Evan Shapiro: I hope he's ready to meet expectations, Go ahead, Marion, introduce our guest. Marion Ranchet: Yeah, so let me introduce Mike Shields. Hey, Mike. Mike Shields: Hi there. I'm extremely self-conscious now, and I'm very concerned my voice is gonna start cracking or something. Evan Shapiro: Ooh, your voice. Mike is, one of the best media analysts out there, other than Marianne and I, of course. Mike Shields: Of course. Evan Shapiro: And, we follow, actually, Marion, why don't you say? You read, you listen to, you consume all of his content. Next in Media is the handle for your newsletter, your podcast. But Marion, why don't you say a few words to Mike's face [00:02:00] about why you like his voice, I think both practically and theoretically so much? Marion Ranchet: Okay. This is very embarrassing, and it's true, I'm not usually easily embarrassed. But having said that, two things. The reason why I started reading Mike initially was I'm not from the advertising ecosystem. I'm interested in it because, of course, it's part of the wider, video ecosystem and we need money. But so I started reading him, and what I love about how he writes, it's very easy to understand for non-ad, ad sales, ad tech people, number one. Then I started listening to his podcast, and I think he have a, he has an amazing voice. You have a good voice, too. Mike Shields: I think all of us sound beautiful right now. This is lovely. Thank you for that kind introduction, by the way, and if I could do anything in life, hopefully I can translate ad speak to regular people. That's, it's not easy, but that's self-admission. So thanks [00:03:00] having me, both of you. Evan Shapiro: I think that is your superpower, is that you make the advertising world, which is very fast-changing, and seems obvious but oftentimes isn't, much more easily digestible and understandable. So let's break this down. I think there's this recurring conversation that we have every year that I'd like to retire, but I'm interested in your point of view on this topic, which is we always talk about the Upfront going away or dying. And yet, I think this is its, I don't, I wanna say, 70th year? I don't know what it is. But, it, it keeps coming back, and in fact, now one would argue it's even more invigorated than it's ever been. It starts with the NewFronts in March and continues all spring. Will the Upfronts ever go away? Why do they still exist? And how do you see the state of the Upfront as you enter, as we... Actually, we're in the middle of the 2026 Upfront. By the time this comes out, the Upfront will have been over. Mike Shields: It's funny, 'cause there were a lot of years as digital [00:04:00] advertising's ascendancy started. What do we, you can, there is no, people rolled their eyes at the TV business. What are you doing? There's no calendar. There's no r- we, you could buy, ad inventory all year long, and why do we have these artificial futures markets, and TV is shrinking, right? So what are we doing here? I think it's, I don't wanna say, it seems unkillable now at this point. 'Cause, and now you've got, I thought it seemed to be a sign of where things might be headed when Paramount decided to not have a live, big splash presentation, and they do their, they do a series of individual dinners. I thought okay, maybe everyone's gonna start doing that. But once you have Amazon and Netflix and, of course, YouTube, the big tech guys coming on board, first of all, it's not a, it's pocket change for them that throw these presentations compared to other big media companies, so there's not, they don't have the. But there's just, there is a real, especially with sports. The, reason the Upfronts exist historically is there was a finite [00:05:00] amount of inventory, brands wanted to lock it up or at least have good pricing and inventory coverage for much of the year. It's true that the, there is, I had a conversation with somebody last year at Cannes. There isn't, there are not a whole lot of, it's not the days of ER and Friends where you have to lock up Thursday night anymore. But with the way that everything has gone on demand, sports and live events are even more valuable, and they are finite. There's not an unlimited amount of inventory there. So there is a reason 'cause there's two things. There's the Upfront presentations where we're talking about this, and then there's the Upfront marketplace, which happens in the coming weeks. Evan Shapiro: Which starts next week, yeah. Mike Shields: And there is a reason for that. That still has a reason to exist. And, what's interesting about, last year, I almost heard it as, and I, think this pattern will probably continue. There's almost two Upfronts now, where the, sports and event stuff goes very fast, and then, everything else takes a little longer but yeah, I don't, [00:06:00] I feel like the big guys are here to stay, and it's just, it's unkillable. Marion Ranchet: Can I ask you something on, you said something very interesting on who's still, investing in that particular format. And so historically, mostly, more the networks, et cetera. What you're saying is that it's tech right now and Netflix, which considers itself as a tech company, these guys are taking over, and so some of the others are still doing it for the sake of still being in that game. What does that say about the advertising ecosystem as a whole? Mike Shields: Yeah, you guys have chronicled this very well, but it's the old titans are now, they're not secondary, but they are chasing bigger, well-capitalized companies that where in some-- Like I always, like for Amazon, advertising is like the, world's greatest side hustle. It's not their main business, but they've [00:07:00] made it, it's obviously their commerce and cloud, but they've made it. It's absolutely massive, and now they're, they've dug in, and now they're going for it. Once, they decide they're going for it, they really go for it. So it's like a real shift in power over the last few years with obviously- Evan Shapiro: Yeah, I think you're, I think you're being kind on purpose, to people that you know. But I do think that the trad media, trad TV, especially trad TV in particular is very much secondary to overall television. Mike Shields: They gotta get in line. It's true. Evan Shapiro: And then, yeah, they're behind. They, you're closing your Amazon deal before you close your NBC deal now. And oftentimes, when you're closing your NBC deal, Amazon is a part of that deal. That's the other major component to this as well. Amazon kicked off the Upfront. The only place Oprah appeared during the Upfront is on Amazon's stage for a podcast Yeah, that's again- but, for a podcast. Yeah for a podcast, not for a [00:08:00] television show. And so I think, there's two major things. I think big tech overtook the center of gravity in media years ago. The year I dropped my first map in 2020. But more importantly, this is more than a television Upfront now. it starts with the NewFronts. Amazon's up there selling all of their inventory. Yes, ad-TV advertising is secondary or a side hustle to them, but their advertising business is now gonna be a $60 billion business this year in retail media, one of your favorite topics. The Upfront started with big tech, with Oprah on stage and Amazon. It's gonna end with big tech, with YouTube and Netflix at the end of the week, and YouTube, being one of the bigger things. So I think big tech has overtaken the Upfront itself, and we're selling more than television, which is why it's never gonna die. We are now selling, Google isn't just selling YouTube this week. They are selling their football package, to your point, but they're selling the whole mishpacha. They're selling the whole flywheel. Amazon, same thing. Mike Shields: Yeah. And, yeah, and, [00:09:00] you see them. I'm sure we'll get into this, the flywheel thing is, a, is something that the big, the old, the trad media guys haven't really been able to pull off 'cause they don't have all these different pieces, and that just increasingly makes it a challenging fight for those folks to try and participate or try and compete. Marion Ranchet: Yeah, fascinating to hear that, for Amazon it's a hobby and they're crushing it. And those who are mainly doing this are struggling. Can we talk numbers, a bit? we've had numbers coming out from Barb about the UK. I'm sure you have number about the US. We're talking about the growth, but when we look at that growth only, again, the same three, four companies are eating everything. Yeah what have we seen for 2025, and what are we seeing in the coming years? Is it, are they still just gonna grow and there's nothing everyone else can do? Mike Shields: Yeah, if you look at, it's funny 'cause I try and, [00:10:00] I try, I talk to people all the time like it's hard not to be, there's a lot going on in the world. There's things like consumers are really pissed off, right? And if they can't buy a home, they can't get jobs, everyone's getting laid off. The, surely this is gonna hit the ad, and, meanwhile, the ad industry is robust, and, but it's very tale of two cities. and you, look at Madison and Wall talks about the last number I saw is the ad economy is growing faster than GDP, which is very unusual. Usually they're in step. And, but it is absolutely being driven by the tech giants crushing their earnings constantly, where you see the traditional media companies are, they're all growing on their streaming business, either subscriptions or ad revenue. But, like cable TV is almost like an albatross and traditional TV sales are down. It is a weird time. I know I'm kinda jumping around here, but the, you hear from advertisers have [00:11:00] no, they, have no, it's hard for them to have foresight beyond a quarter or so. Where they used to wanna have ability to plan a lot more. And they, it's really, it's like a, it's almost like they learned how to live that way in COVID and they've never stopped, and now there's, the economy's always had this stability, but this uncertainty that's attached to it. So it's gonna be, it's gonna be an interesting year because I think the tech guys are gonna continue to pull share and the, traditional media companies are gonna, they're going to, they're gonna succeed when they have sports and things like that, and it's gonna be a struggle for the rest, the remainder. Evan Shapiro: Why don't we talk about the trends for the year? Because you keep touching on a number of them. I think, at the top of the funnel for the Upfront is sports. Everybody says a lot of the same things over and over again, which to me creates a sameness that's dangerous for the smallest players in the ecosystem.[00:12:00] But crucially, no matter what anybody said about anything, sports was at the center of every single presentation this week. A, that creates even more sameness. How do you distinguish when Roger Goodell is on every single fucking Upfront stage, how do you create distinction? And then secondarily, I wrote about this week, these, sports rights, as a cost is quadrupling or quintupling the rate of growth of television revenue. Is-- And big tech is bidding it up because they don't need to show a profit. Is this a sustainable thing? Is, are, is big tech gonna chase trad media out of sports? Is this an arms race that's winnable? And is the return on investment actually that great? Mike Shields: I, would be, I'm worried. It's funny 'cause I don't know. You could see a world where if, Netflix has dabbled in the NFL, if they get serious, Evan Shapiro: They're getting bigger, they're gonna go bigger in it this year. Mike Shields: YouTube is the same. They could start [00:13:00] taking, locking things up and shutting us. Now, I, it is somewhat in the, it's in the interest of the leagues to, the NFL loves to just partner with, like you said, they're gonna make a deal with everybody. They liked being diversified, You know, there would be money always talks. There, there would be some hesitancy on their end, I think, to let someone, let, like big tech completely lock it up. They like being on broadcast still to a degree. They wanna have the ability to reach the whole country. Evan Shapiro: But in the next five years, sports rights amongst just eight companies is gonna go up $34 billion. 30 billion of that is Netflix, Amazon, Google, and Apple. Yeah. So the big tech- they have, other than Netflix, who's desperately needs to hold onto sports, Apple, Amazon, and Google can hide their sports rights inside this massive flywheel, never report a return on investment. It's not about a specific- return on investment. It's about the stickiness of the ecosystem and the data it produces and the tie-ins. Amazon's AI retail [00:14:00] ad business as a way to advertise inside the NFL on Thursday nights is massive. And their NBA rights the same thing. But is the, is trad media, Paramount paid $7 billion for UFC. There's a new, there are new renewals coming up for the NFL. Can trad media return as much money as necessary from advertising to actually pay Mike Shields: I mean in that example, I don't think so. And I, don't, you see Paramount, the math already on that, on Paramount just doesn't make a lot of sense, and it's, they've got, they've already, they've got so much, they're taking on so much debt with the Warner Discovery deal whenever that closes. Evan Shapiro: $80 billion in debt. Mike Shields: I don't, it's like they're coming together to have to create more scale and clout theoretically, but then, it's like they're saddled with more problems as they come together. I don't know, I don't know how competitive they can be on some of these deals. If the NFL rips up its contracts or the NBA coming up, [00:15:00] there might be a time when big tech, 'cause it's al- I'm contradicting myself a little bit. It's also in the interest of the leagues to go to streaming more because they get younger. Evan Shapiro: There's more money. Yeah, and they get younger. You're absolutely right. Mike Shields: Yeah, Amazon talks about, the age of the Thursday Night Football and the NBA is lower, which is good for the sport long term. Yeah, there's a world, you're gonna have only a few players that can actually bid on sports, and that's, that could hurt traditional media. Evan Shapiro: There's another story that sits alongside of this. Unusually, our president is suddenly interested in antitrust laws with regards to the NFL because his billionaire buddies who, Yeah ... yes. His billionaire buddies, specifically the Ellisons, are complaining about the cost of the NFL. Do you think there's a world in which the administration gets involved and caps the amount that the NFL can charge their platform partners? I mean- Marion's shaking her head. I think- Marion, I'd be interested in your...go ahead. Mike Shields: [00:16:00] But not being an antitrust expert, I would, I feel like that would be thrown out of court, but you know Evan Shapiro: He's saying it. Mike Shields: Never say never with the, this administration will get involved in anything they so choose at any moment. Evan Shapiro: As long as they can benefit. Marion, what are your thoughts on that? Marion Ranchet: Like Mike says, never say never with your administration, but I feel it's a tad too far. We do have something in Europe that perhaps you guys don't have, that is actually protecting traditional media, which is, in every country there's a list of events where, you need to have a free to air broadcaster in the mix. The reason being that pay TV is, very much not available to everyone, and especially right now with all of the trad and big tech, and those sports rights going up, as a fan, you end up having to have multiple subscription if you wanna have, the [00:17:00] entirety of the sport or sports you're a fan of. So in Europe, we have that protection. They're called crown jewels, in the UK, and, every year, that list goes, a bit longer, again, to protect the consumer. 'Cause we haven't spoken about that, but, those sports rights are going up through, the roof. The fans are being hurt. Evan Shapiro: It's why Netflix costs more, it's why Amazon costs more, it's why all these, subscriptions cost more. Marion Ranchet: And why this World Cup is gonna be interesting as well because there's the fact that it's in three countries, there's the time zone, et cetera. There's a lot of things. There's the fact that, to make more money on advertising, you guys are actually changing the rules of the game and pushing for breaks where there shouldn't be any breaks in football, soccer. There's a lot of that, but it's gonna be an interesting test because we're gonna see whether, what is worth more. Is it [00:18:00] the broadcasts or the streaming of the full games, or is it the highlights? Evan Shapiro: Or the, yeah, the highlights. That's exactly right. Yeah. Good point. Marion Ranchet: And so that's one of the things right. Evan Shapiro: That's what a lot of this conversation in the Upfront and NewFront, the conversation moving from basically South by Southwest to the NewFront to, or actually CES to South by Southwest to the NewFront to the Upfront is which actually is more valuable. And I would argue that the whole sports consumer, the clip consumer, and the couch consumer, the television consumer and the toilet consumer, I think they're equally important, and I think there's a huge movement to bring these things together. Josh Demaro in his first earnings call, and then again on stage at the Upfront, talked about vertical on Disney+. Yeah. Netflix is really pushing vertical right now. Who just, NBC is pushing a, putting a tremendous amount of effort at least, I don't know how much money, into vertical premium w- [00:19:00] serialized reality television shows. They're gonna verticalize Bravo to a certain extent. That's a huge trend that I'm seeing more for the rest of this year, throwing, flowing through into next. Mike, what are some other trends that you've noticed through this, the course of the first and second quarter of this year during the conversations? Big trends that are taking hold here in the Upfront, and that you think will play out through Cannes and the rest of the year. Mike Shields: Sure. I'm not breaking any huge news here. The ad industry broadly has, it's been, it's always had a bent towards performance advertising, and it's just like it's gone towards addiction, where like the, every, because of things like you mentioned, Amazon's retail media business, where they can show you an ad on Amazon, and you will go and buy the thing there, and they can connect, those things. Evan Shapiro: In the ecosystem, in the environment. Mike Shields: They want every everything to work that way, or that looks so good on the spreadsheet to the CFO. And it's, so it's just, [00:20:00] it's pushing the ad industry is obsessed with everything has to be about outcomes and provable, which is perfectly reasonable. It's just, it's, so TV is trying to play in that game, and there's a lot of pressure on television, like we talked about. It's just TV by nature is historically, it's been about brand-building, and you don't, you can't click on something and buy. To a large extent, you can't shop on your TV yet. There is a lot of experimentation there, but it's the actions you take from seeing a TV ad are not necessarily immediate and easy to track. So there's, but they're trying, everyone's trying to compete there. It's not easy. Evan Shapiro: But I do think if you look at, so there's another, around the shoppable end of things, there's another trend that kind of sits right alongside of that, which is the AI of it all. Yep. And everybody seems to be in the performance conversation, they're now adding the word AI. Very often these are just talking points manufactured. [00:21:00] It, the full funnel television is a catchphrase that everybody is using now. But you've got Amazon in particular, and I think, YouTube as well, doing some very interesting things with regards to on the Amazon side of things, using AI to dynamically insert creative based on the home that is watching that show at that time. So you're talking about infinite pieces of creative targeted around certain products for certain consumers who are watching certain shows in certain regions at certain times. And then, YouTube has this peak moment technology, which is it's looking for the kind of emotionally high points of television and inserting ads that match directly at that point. Don't you think that it, with things like that happening, we're on the short path to shoppable advertising in television? It does, that, the dynamic ad [00:22:00] insertion on Amazon allows you to add to your cart on your television as long as you have Amazon installed on your television, which let's be honest, most consumer homes in the US do. Mike Shields: I am, I'm a little torn on this because I've sat and watched a Thursday Night Football game and seen all the add to cart ads come up and if I'm, like really into the game, it's almost like I don't wanna deal with this right now. And 'cause yeah, but I'm also not, I'm not Gen Z and I'm not, I'm a different kind of consumer- Evan Shapiro: You're not? Mike Shields: I'm used to I know I look that way. Yeah. Like I'm used to the lean back, sit there, and hang out, where that's just like a different, there's a different level of attention and participation. I'm generalizing about younger consumers who've grown up with digital media in a different way. And there's a lot of debate about whether it's going to, first of all, to get, I think you're right. There's all these, everyone's trying to get this shoppable TV thing and whether it's, there's a debate about whether you're gonna interact with your [00:23:00] phone, with the remote, with some kind of voice, activation. It's gotta be something that everyone has that's simple, so it's gotta be, it's somebody like Amazon can make it happen or maybe a Walmart if they make the right number of deals. But, it's not the nature. TV is like often either escapism or you're focused on sports. It's a little, you're asking, you gotta train consumers to expect this, and it's gonna take a little time. But I do think if someone could figure out, it's probably, I think it's probably gonna be the phone that is the way, that people, send a phone and either deal with this ad later or send me an email or whatever, that kinda thing might works, but it's, I still think the jury's out on whether shoppable TV's gonna be mass. Marion Ranchet: Yeah, it's been a, it's been a trend that we've been waiting for to pan out for many years. We haven't seen it coming. But the phone thing, I would tend to agree with you because we, had data, a few weeks [00:24:00] back, Evan, on the number. It's over 80% of people actually, watch TV and use their phone at the same time. We're, never, we're no longer doing this one thing at any one time. Yeah. And we tend, it does get hard. Evan Shapiro: It's just, under 80%, but yeah. Marion Ranchet: So Mike, one thing, if I can take you just a quick second to, back to outcomes. Do you think that TV, because there's a lot of, there's a lot of discussion on the fact that the big guys, big tech is taking all of the new advertising money, especially from SMEs because they're performance-based, et cetera. And so if TV wanna have a piece of that action, then they need to be more performance-based, more outcome-based. Do you think there's a path forward? Can it change itself that way? Have you seen any players, I'm thinking folks like Vibe, et cetera, who are trying to deliver just on that promise? Mike Shields: I guess, so here's the, [00:25:00] I do think there is potential. Here's the problem, is they're all doing it their own way right now, where you have NBCU has their Performance platform, and Disney has their Compass platform, and they all have their own, proprietary identifier and proprietary audience graph data. And that's all great, but it's, brands don't wanna just optimize and look at outcomes in a Disney universe. People watch all kinds of different content. And you could say the same thing about people don't just spend time on Meta, but Meta is the whole, and reaches billions of people a day, it's a different game. So there, there is some indication that maybe the TV networks will start working together through their, there's a partnership coming out, actually being announced today, through OpenAP. They're trying to have, a common way of tracking outcomes and the problem is any joint venture between big rivals is always hard to [00:26:00] manage, and there, there's, the, whe- whether you prioritize your own stuff or not. So it's, I think perhaps AI helps over time improve the measurement and the ability to show. The magic of Meta and Google is they're so good at showing you stuff that you don't even know you want, and that's like, TV isn't really there yet with advertising. It's a blunt instrument still. If we can get to that place where I think that will improve performance and trackability. But, it's just, it's hard because you're also talking about advertising something you can add to your cart right now and a Lexus. There's a real range of the timeframes and when people consider those purchases and how they act, and it's just, it's hard to put all that together in one piece. Marion Ranchet: Do you think there's room for, 'cause what I'm hearing is you have big tech on one side, they have their own silo, but it's so big that it's worth spending time [00:27:00] buying within their ecosystem. But on the other side, you have Disney, NBC, everyone doing its own thing, and there's no way to easily buy and then in a measured way, et cetera. So does that mean that there's room for a non a partisan layer, whoever that is, to actually do that on behalf of the TV, the wider TV ecosystem? Mike Shields: Yeah. If someone, and I don't know if that's a Vibe or a Mountain or, I think even a Nielsen would like to be that player where there's a cross-channel, omni-channel, and that, this is also something that could theoretically come out of the agency world or even brands could build it. But if somebody could nail helping you buy and measure and optimize towards outcomes across the entire ecosystem, easier said than done, yeah, there's like huge potential for that. Evan Shapiro: I don't know. I think, there are a couple players that are gonna wind up. Everyone, and you [00:28:00] hinted at this, Marion, but everyone likes to, poke at the big tech walled gardens for grading their own homework. That's your, I think your silo reference, right? But there's two parts to that. First of all, grading your own homework is not really accurate. They don't grade their own homework. They grade their homework with the partner. Procter & Gamble grades the homework alongside Google and Meta and Amazon at the end of the day. They decide, and very often P&G, Unilever, these massive companies are buying direct. They're not even going through agencies, or third parties. They're using third parties to measure. But the other component to this is Roku has an Amazon deal. Samsung has an Amazon deal. Google has, is the number one operating system for televisions on the planet Earth. It seems to me that the aggregators of that tracking data building the audience Upfront, who you most wanna target at the optimum moment to buy your product, and then secondarily tracking them on the back end from a behavioral and attribution standpoint, I don't see how anybody [00:29:00] competes with Amazon and Google. But it doesn't mean you can't build your own silo and make it the best, most powerful thing that you possibly can. There, Mike, two parts to this question. Do you think trad media, including the OEMs, are ceding their power and their leverage to big tech by basically allowing Amazon to be the backbone of ad reading for a lot of what's going on there? And is there a way for trad media to either partner or build their own version of that to truly compete in what Marion's asking about? Mike Shields: Yeah, that's a great question 'cause it, it's very telling you into this Amazon struck deals with, I think it's Netflix, Disney, Roku you mentioned, which was at the time, whoa, those are all, these are like blood rivals- and they're working together. It's, it feels that's short-term thinking. Like they're gonna get some fresh demand 'cause Amazon's got this, they've [00:30:00] got this incredible you know, identity and the ability to track outcomes. So the, it's take the money now, but what do you do in your business long term? Yeah. But they, it may be that so- that, And, to be fair, not, every product lends itself to Amazon's data. Not everything is bought and sold on Amazon, so it won't work for everything. But once they get a taste of that, it might dampen their appetite for trying to build something that's a rival, 'cause I just don't know they're gonna have the, enough identity data- Evan Shapiro: But then don't we wind up with the same kind of big tech oligarchy in television that we have in social video? Mike Shields: That's a real risk. And, that opens things up to, I know, for example, Yahoo would like to be a player surprisingly. they're, an ad- Evan Shapiro: I remember Yahoo. Mike Shields: They have an ad tech renaissance. Yeah. Cause they've actually got some really impressive identity data that they can apply to television. Maybe they come across as more neutral or less scary than an Amazon. [00:31:00] but I, don't know if you can, and then, the, then if, yeah, you're right, like YouTube could get more or Google could get more in the mix here. The, it's funny 'cause how often you hear the trad media guys scream about the walled gardens, don't wanna, that's not fair. Then they're, but they're now trying to mimic their advantage and also work with them. It's just, it's a business of contradictions. Evan Shapiro: I think there's a way for them. I don't think there's a way to avoid working with Amazon, Google. I think you can avoid working with Meta if you chose to, but I think Google and Amazon are unavoidable. And they, I'm gonna say this out loud: Google is not terrific at selling advertising. It's not their number one skill set, right? They sell audience, but they don't-- their contextual advertising and marrying environment with creative is not necessarily their number one skill set. Amazon's not great at that either. They do other things incredibly, [00:32:00] well. neither of them really, Amazon makes content, but that's not really their specialty either of these two. So the publishers and producers of content have a viable partnership long term with them. I don't know how much the OEMs do. But this hate-love relationship that they have, I think it's just, if they can make it more rational and understand that they're gonna wind up making deals with all of these and get into it, especially the YouTube of it all, and the aggregated sales platform that Amazon is doing, not just from an advertising standpoint, but from a services standpoint. They're, becoming one of the great aggregators of streaming out there as well. Yeah. Do you think that there's a generational shift afoot at some of the trad media or the big tech players where we can maybe find a new relationship that isn't so contentious and is almost like old school cable days where everybody peacefully coexisted and just sold more advertising for the entire ecosystem? Mike Shields: I would tend to agree with that, but then if you [00:33:00] look at what the Ellisons are doing, they seem like they're, they wanna be a tech company, and they want to amass the, their own similar advantage. Again, is that realistic over time? I don't know, but I think I, you saw it even, you mentioned the Amazon deal, like NBC has a deal with Instacart, for example, that I think in the past they would, maybe try and do their own thing there, but it's just they're, it's, they're gonna need help and they're gonna need a lot of, I think it's the era of unexpected partnerships because they could both kinda help each other and it, their businesses are complementary and not necessarily in competition. So yeah, I do, and there is a, there has been a changing of the guard, especially, Disney's got a new boss obviously, and NBCU is going through a lot of change as well. The, they're gonna have to have a different attitude about, and just e-e-accepting your place in the media business is, has not been easy. Like the, it's like losing your empire [00:34:00] but re-realizing you still gotta deal with the US now or something. Marion Ranchet: Accepting your place. Let's assume people actually do that. They accept their place. What should they then focus on? What is the sweet spot? What is their edge within that ecosystem? Mike Shields: I think, and it was interesting, we're probably getting to one of the other, one of the other big trends and, it's kinda obvious. We talked about how big sports are and events are, but, TV still does the mass gathering. As much as their day-to-day ratings for the Wednesday at 8:30 are never gonna be where they were, they can do, yesterday Disney talked up, not, they, last year NBC had, or this past winter they had the Olympics and Super Bowl and the NBA All-Star Game. It was like their legendary February. Now, Disney has the Grammys and the Super Bowl and, three other things I'm not thinking of. [00:35:00] But they, so they can do those event immediacy. 'Cause brands still like this idea of, "I wanna rack up 10 million people in one night. I've got a movie opening. I've got a sale this weekend. I'm selling my cars," whatever. And TV, and, even with, they're starting to eventize reality TV with Bravo and all these crazy, the wrap-up of Summer House, some of these things that are, that people are obsessed with. They're still really good at that, and I think that's where TV is gonna lean into. As much as I said, as much as I brought up the outcomes thing, they spent most of their presentations talking about these like splashy, big moments, right? And the emotional connection that they have with viewers. And it was, it was funny, Evan, the, at the Disney thing last night, the head of sales, Rita Ferro, said, "Hulu is now the number one ad-supported streaming, platform." And I, took a second. I'm like, "Wait, what?" And then, oh, you're not counting YouTube. [00:36:00] You're, you deliberately, you're counting Evan Shapiro: She means premium. Mike Shields: Yeah. And it, there was definitely an old, traditional TV versus YouTube kinda undercurrent to all this. Yeah. And YouTube, we know, you guys have talked about it a ton. They're, dominating this, the streaming share right now, right? they are taking over CTV slowly but surely, but they still don't have, and they really are massively influential with culture, don't get me wrong, but they don't have as many event-like pieces. So much of YouTube is on demand with creators, and that's great, but that's like a little bit of a contrast or a little bit of a battle going on. Does YouTube need to, they've got Coachella. Evan Shapiro: Yeah, but let me dive in there. So Comcast had the Super Bowl and the Olympics back to back in first quarter. They generated $2 billion in additional ad revenue from that. And yet, their net income [00:37:00] fell in the first quarter by 36%. Their EBITDA fell by 17% in the first quarter. Now, you talk about, YouTube, and, their events, yes, they don't have as many as a lot of these other broadcasters, but they also have 1.2 billion hours of programming, which is hundreds of X, everybody else. And then on top of that, they have the NFL, 17 weeks, every, every year now, in the fall. They have the Oscars coming soon. Mike Shields: Yep. That's exactly why they're doing that. Evan Shapiro: Coachella is a, is another one of that. And then, going back to Marion's point from earlier, when the Super Bowl is on, everybody goes to YouTube before and after to watch the clips, watch the commentary, watch their favorite creator, and not just Google, YouTube obviously- Mike Shields: Very true. Marion Ranchet: Yeah. Evan Shapiro: But also TikTok and Instagram as well. So I think, even in the event end of [00:38:00] things, and, then the other thing to consider is that digital is now getting 75% of- pure play digital is getting about 75% of every US ad dollar. About 60% of that goes to just Amazon, Meta and Google. Does the television ecosystem really even matter to a certain extent? Isn't it just those three against each other? Mike Shields: Wow, that's bleak. Yeah, it matters. I, there's, you're right, the economics are pretty screwy, that you have the best quarter ever and you're losing and you're taking a hit. And I, a lot of that has to do with legacy structure and losing money on Peacock and things like that. It matters for what it's good at. It, whether it's sustainable long term is a, real question. I think the model is very challenged, and it's only gonna get harder. Like you said, where you're like, once the rights get that, once the rights to the stuff that they've, they're holding onto becomes untenable, then, then it's [00:39:00] a, it's really tough to- Evan Shapiro: What happens? Mike Shields: I don't know. Evan Shapiro: I mean, it's the reason why Warner Brothers Discovery is disappearing into Paramount, is because they just can't compete anymore. And now they're going to a billionaire, nepo king to fund the arms race. But I just don't, anyway, I didn't mean to get that bleak. Yeah, but betting on sports as the center and only thing that you're gonna hold onto just feels like a race to the, to oblivion. Mike Shields: And it feels like they're not trying with other stuff. Go ahead, sorry. Marion Ranchet: But I don't think it's the only thing they bet on. I think, you look at the programming all year long, there's more to that. But, sports is the pretty thing that they flag to get the ad dollars. One thing that I have to say, I'm listening to this and it's a, it's, it can be a bit depressing. Having said that, are you noticing that [00:40:00] everyone is trying to mimic TV, right? Mike Shields: Sure Marion Ranchet: So when you look at the streamers looking more and more to be like TV. Mike, you may not have seen this, but on the French market, Netflix and TF1, which is the main commercial broadcasters, are gonna launch, together in June, July timeframe. So essentially all the content and the TV channels from TF1 are gonna be on Netflix France. So everyone wants some piece of that, TV action. YouTube has spent a year and a half, pushing, pushing that agenda. We're starting to see Insta launching their own app, et cetera. What is, so what are you, number one, what are you seeing from, others? I'm thinking Meta, beyond, Instagram maybe. TikTok approaching TV. And if TV is so sucky, then why does everyone want a piece of that action? Evan Shapiro: Wanna be TV, yeah. Mike Shields: Yeah. That, I think that big [00:41:00] screen in the living room is still this really compelling piece of real estate, and you got the communal viewing thing. And I think you're right, Meta and, TikTok are sitting there saying, "I, don't like that YouTube has taken over that screen in such a big way, I want a piece of that." But it, as interesting, I was at an event last week in LA with a very creator centric event, and TikTok and Instagram both appeared. And TikTok is kind, they have tried to be on TV. It hasn't really worked. They're kinda backing off that it seemingly, at least publicly. And then, but Meta is both. There was a story in Digiday where they are talking about bringing their robust data to TV advertising in some fashion. They've been trying to play, find a way in there. And then yeah, they're trying to make Instagram on TV a thing. I think there is just a, but it's funny 'cause we're talk, it sounds crazy. It's, what's the TV ad market? 60, 70 billion. Like there are other, these companies can find other ways to go after. [00:42:00] It's not, that's not the, it used to be that was the end all like golden thing that you had to get a hold on. They, found a lot of other ways to find ad dollars. But there is still something about owning that centerpiece of culture and the center of the... And I think brands still think that big screen is super effective place. As much as people are consumed by TikTok on their phones and everything else, they still like that real estate, so that's still seen as super valuable and compelling. But I, now I don't know if People do watch YouTube Shorts on TV to a degree. I don't know if TikTok or Instagram will work on TV, but it's gonna be fascinating to see how they try and pull it off. Marion Ranchet: I read your piece on that topic, from the summit you were at, and the person from TikTok I think was saying not shorts as is, that it would take perhaps a bit of a transformation in going longer form, et cetera, et cetera to actually be able to be a player within the TV ecosystem, and that's what YouTube has done, right? The fact that they've done all of those [00:43:00] deals with traditional media players is because they wanna bring the right content for a living room, experience. But if, so that is the edge of traditional media, right? That knowhow on that big screen, that production of content, live events, et cetera. What could they do? You see everyone, launching their own, streaming ecosystem. The broadcasters in Europe have been very active on that front. But they're still at that moment in time where a lot of the money is still coming from linear. It is either growing tiny bits or decreasing, and then streaming, advertising is growing double digits but, it's, $1 on one side, one cent on the other. I'm exaggerating, but it is not compensating- Mike Shields: It's not proportional, yeah. Marion Ranchet: the lost, yeah, on linear TV. So in your opinion, what could they do? Where should they invest their [00:44:00] time and effort to turn things around to some extent still by agreeing that this is their place in the ecosystem? Mike Shields: There's not a lot of, there's not a lot of easy answers there, and you are seeing them, them being the social media companies that we're talking about, toy with us like short form vertical video. I, it's like, I think it's a worthy thing to try. I just don't know if it's them. And it's gonna be, I applaud them, like I, Univision trying like micro dramas and that, that might be a huge hit or might not. I don't know. It's, like I think if it, with Paramount it's not, I know that Paramount and TikTok are not owned exactly by the same company, but they're gonna, like I would think that's gonna be, that's an asset where the other, if they can draw up, they can draft on each other and maybe learn from each other where you can maybe learn something about the TikTok algorithm and apply it to [00:45:00] Paramount Plus or whatever HBO Plus is gonna be. Evan Shapiro: The TikTok algorithm is now owned by Oracle which owns Paramount and CBS. Mike Shields: Right. And I know they're gonna keep 'em separate and never talk, I mean realistically. Yeah, like they've gotta maybe, can they borrow pieces from these companies without trying to just do a knockoff of what they do. Evan Shapiro: I think, and Marion and I started this year off by talking about look at France as a kind of microcosm of where the future of television is gonna wind up. And if you look at the TF1-Netflix deal and the France Television-Amazon deal, and then both TF1 and France Television have made recent announcements about partnerships with YouTube as well putting programming up day and date. I do think, I'm gonna answer Marion's question in my own way, I think there is a way to embrace what's happening on these massive platforms, and take a share of it there. I think by, if you look at the top [00:46:00] five most used video platforms in the United States, only one of them is a television service, Netflix. Everything else is either a parasocial video platform, or in the case of YouTube, it's both a social media platform, it's a search engine, and it is also a very viable, it's the most popular television channel in the country. And Netflix sucks at selling advertising, just fucking terrible at it, which is why they made the deal with Amazon. If Disney and Hulu and Fox and Paramount, and the rest wanna climb into that top five, they have to develop the full circle, a full suite of services. What's great for them, though, is if they take their massive libraries, their high-quality, professionally produced libraries, and distribute them in vertical on social. Disney did this recently with the High School Musical. They took the whole film and put it out in 10-minute [00:47:00] increments on TikTok, and it crushed. So I do think if they just agree to live in today versus longing for the period when the Upfront started, they can compete and YouTube needs these publishers. Amazon and Meta desperately need these publishers to feed the algorithm. So I think there's a way forward, but to the point we made earlier, you have to get over hating them so much and hating the fact that they're winning, and agree you're gonna lean into their specialty. Mike Shields: Do you think, I'll ask you guys this, do you think that the big traditional guys should make their platforms feel more social? Should they, I, don't, do you start making everything look like YouTube and TikTok and that's dangerous, but do you start making them where they Evan Shapiro: No. No, I think, you have your tel- Like popular culture, things are only popular because they become popular on social media. Let's be honest. That is how things [00:48:00] become popular. And so agreeing to all of this, that you're actually gonna drive people to a movie theater with TikTok and agreeing to program your social platforms the same way, not, sorry, not the same way, but with the same intentionality that you program your streaming service and your television channels, and agree that's the flywheel, that part of the flywheel is gonna be owned by someone else, and a huge part of the flywheel is gonna be owned by the consumer, then you can get over this hump. I think Fox is actually doing the best job of this in the wor, actually, no. I think the France, the French market is really leading the way, as Marion predicted would happen. But I do think in this country, between Tubi and their Creatorverse. Mike Shields: Very niche stuff there. Evan Shapiro: Their deal with Holy Water, their deal with Red Sea Ventures, their deal with Whaler, and their deal with Dhar Mann Studios, oddly, the Nepo-run Fox- Mike Shields: I know. Evan Shapiro: And I wrote a piece about this, is leading the way of how to transform trad media, from my standpoint. Mike Shields: Yeah. It's almost like Fox has gotten, [00:49:00] they're smaller, and they're just like, "We don't have to try and fight these crazy fights." More nimble. "And just let's try stuff." Yeah that, that is really interesting. Marion Ranchet: I think we could stay for hours. So the Upfronts are almost done, and then in a few weeks time we'll have the Lions. Are you gonna be there? Are we gonna see each other in person? Evan Shapiro: I will be there, yes. Marion Ranchet: Nice. Evan Shapiro: Great conversation. Your voice crush came on. And, you didn't blush the whole time, Marion. I appreciate that. Mike Shields: I can leave you a voicemail if you want, something just to hold on to or. Evan Shapiro: So there you go. You had your favorite voice in podcasting on. How did it, how do you think it went? Marion Ranchet: It went great. he's, he's fascinating. I'm saying it, the voice is amazing. And I think we need to do more stuff with him because he's bringing a different view on things. I think he's so much into advertising. We're a bit more within the wider ecosystem, so I think that feeds, nicely. So let's do that again. Evan Shapiro: All right. Marion Ranchet: And it's not just because I love his voice that I want to do it again. Evan Shapiro: All right. All right. Just, yeah, don't replace me with him. Marion Ranchet: I won't. Evan Shapiro: You're [00:50:00] blushing again. Marion Ranchet: Ever. Promise. Evan Shapiro: Thank you for a great episode. That is Marion Ranchet. Marion Ranchet: And that is Evan Shapiro. Evan Shapiro: And this has been the Media Odyssey podcast. We'll see you next time.