As Digital Media Cuts Costs, Hulu and YouTube Take Spotlight at NewFronts

YouTube CEO Susan Wojcicki onstage at YouTube Brandcast 2019 - Getty -H 2019
Taylor Hill/FilmMagic for YouTube

The tech giants showed their muscle when it comes to commanding the type of ad buys that media agencies typically reserve only for television networks.

In the heyday of the Digital Content NewFronts, presenters sought to lure ad dollars away from TV through over-the-top events packed with celebrity cameos and unchecked claims. But the 2019 summit was a decidedly more muted affair.

Digital media’s downturn cast a cloud over the five-day event, held April 29 to May 3, as a scaled-back lineup of presenters focused on more substantive (though less news-filled) messages about the influence of their brands. On the surface, the slim schedule — just 14 showcases this year compared with nearly 40 in 2016 — appears to signal the beginning of the end for the NewFronts. But it may in fact serve as a road map for where the online video industry is headed.

Among the flashiest and most well-attended events were the presentations hosted by the platforms, among them Twitter, YouTube and new presenter Vudu, that have emerged to distribute digital video programming. While publishers like The New York Times, Conde Nast and Vice Media touted slickly produced programming that will appear on other people’s networks (not all of them ad-supported), these tech-fueled platforms were able to offer up advertising-driven experiences that most closely resemble television.

Legacy cable business Viacom, for example, kicked off the week with the April 30 announcement that it would funnel hundreds of hours of library television titles into newly acquired ad-supported video service Pluto TV. Shows like The Hills, Tosh.0 and iCarly will now be distributed via branded channels on Pluto TV, which is even designed to mimic the lean-back, channel-surfing experience of watching linear television. Twitter, meanwhile, announced a slew of new media and entertainment partnerships, including with Univision, The Wall Street Journal and Bleacher Report, for a slate of live programming designed to capture the conversations already taking place between its 134 million daily active users. “We’re not guessing what people on Twitter are interested in,” said Twitter head of content partnerships Kay Madati. “We know.”

First-timer Vudu, a digital video marketplace owned by Walmart, unveiled a lineup of ad-supported originals that will be available to consumers for free. The shows, which include a Mr. Mom adaptation and sci-fi drama Albedo, are designed to be family friendly and appeal to middle America, which senior director Julian Franco called “a big blank space” for the retailer to play in.

But it is Hulu and YouTube that truly showed their muscle when it comes to commanding the type of ad buys that media agencies typically reserve only for television networks. Disney-owned Hulu, which calls its presentation an upfront not a NewFront, on May 1 revealed that it now has 26.8 million paid members in the U.S. That, CEO Randy Freer boasted, makes it “the fastest-growing pay TV provider in America, streaming or otherwise.” While it is still smaller than Netflix in the region, Hulu offers brands something Netflix can’t: an opportunity to advertise against its audience. And not only did it show off big-budget originals like Catch-22 and Four Weddings and a Funeral, it also revealed the power of its vast offering of current, next-day TV and library programming. “Streaming is TV,” said Freer. “It is simply better TV.”

As it does every year at its event, dubbed Brandcast, YouTube made the case for why it is a better buy than TV, namely that it reaches more young people than linear networks. And while YouTube always fights against the perception that it is full of low-quality, user-generated programming, the Google-owned company stressed that the viewing experience is similar to television, with viewing of YouTube on TV screens topping 250 million hours per day. Its YouTube TV service even offers a cable-like bundle of live channels. "Primetime is now personal," said CEO Susan Wojcicki, adding that no one's version of primetime is the same.

Though the company has struggled with the rampant spread of misinformation and exploitative programming on its platform, executives didn’t dwell on the topic during the May 2 presentation because they knew they didn’t have to. It still delivers a huge audience of engaged young people, all in one place. “Let me be very clear, living up to our responsibility is my number one priority,” Wojcicki said before ceding the floor to chief business officer Robert Kyncl, who talked up new plans to offer all YouTube originals, including scripted shows like Cobra Kai, for free with ads.

As the digital media industry has evolved and companies like BuzzFeed, Group Nine Media, Fullscreen and others have backed away from hosting big, expensive NewFronts events, these platforms have come to dominate the week. And their presentations often come with more heft because they are backed up by a real commitment to providing this programming in the year ahead. Now, with new services from NBCUniversal and Jeffrey Katzenberg’s Quibi both expected to roll out within the next year with ad-supported options, there’s a good chance the NewFronts could get a couple more presenters next year.