If online video is poised to replace television, advertisers haven't gotten the message.
Starting Monday, thousands of ad buyers will settle into some of New York City's most ornate auditoriums to watch the major networks present their new shows and best arguments for advertising with them. Despite ratings being generally down, networks hope to make at least a little more than the roughly $9.3 million they earned after last year's presentations.
But before ad buyers even take their plush seats, many will have already heard pitches from web giants like Hulu, AOL, Yahoo and YouTube about why online video is the future. Since networks call their presentations upfronts, digital companies call theirs newfronts. Take that, networks.
Online's cachet is clearly growing: Yahoo rolled out a new show from "Hangover" star Ed Helms. AOL had one from Gwyneth Paltrow. Both sites, as well as YouTube and Hulu, are offering richer slates than ever before.
Buyers seem to be taking note: A Pivotal Research Group predicts $3 billion in total ad revenues to online video this year, up 32 percent from 2012 levels.
But most are still sticking with TV, thanks – and spending 20 times as much on TV.
Total domestic TV ad revenues are expected to come to $61 billion this year, the report said.
The reason? People still watch much more TV than they do streaming video -- in waiting rooms, while they're busy doing something else, and sometimes even because their favorite shows are on.
"Just because it's passive doesn't mean it's not viable to advertisers," said Pivotal Research Group analyst Brian Wieser, whose report declares NewFronts to be "no threat to traditional upfronts."
People watch about 2.5 percent as much video on their computers and phones as they do television, he said. The percentage goes up slightly when tablets are included, but doesn't quite double, he said.
People who work on Madison Avenue or in Hollywood often shake their heads at such figures, Wieser said, noting that their children watch videos all the time on their iPads. Those children are not the national norm, he said.
The competition for ad dollars isn't a straightforward fight with TV on one side and the Internet on the other, fighting for the same pot of cash.
For one thing, most TV networks have a vast online presence as well. NBCUniversal, for example, will sell its February Winter Olympics advertising on its broadcast network, its cable stations, and online. And Hulu, one of the biggest online players, is owned by NBCU, Fox, and Disney-ABC.
Additionally, TV and digital spending don't generally come from the same advertising budgets. That means networks are competing with other networks, and websites with other websites – but they aren't necessarily fighting each other for the same pot of gold.
Networks don't sound worried about losing money this year. CBS CEO Leslie Moonves said during an earnings call last week that his network is looking for rate hikes of about 10 percent over last year's upfronts.
"As Leslie said during earnings, we will lead the marketplace in both pricing and volume," CBS president of network sales Jo Ann Ross told TheWrap.
Her network -- which booked the most advertising last year -- is in the best position heading into next week's upfronts because it is leading in both the key 18-49 demographic and in total viewers. All of the networks are down in the demo, though CBS is down the least -- 3 percent. And it is the only network to be up in total viewers, improving 2 percent. Last year it led with $2.7 billion in upfront ad buys.
The question this year is which networks will land in second, third and fourth place. Last year it was ABC, Fox and NBC, respectively. ABC had $2.5 billion in buys, Fox had between $1.9 and $2 billion, and NBC had about $1.8 billion. The CW had about $420,000.
This year, NBC passed ABC for third-place in the ratings. And NBC has the Olympics this season, which may also help sales.
Fox's biggest hit, "American Idol," is down significantly in the ratings this season. And Fox has fewer hours of advertising to sell than the other networks since they air shows until 11 p.m. and its primetime ends at 10.
Ad buyers often say in the week before upfronts that they plan to spend less this year than last. Networks, in turn, predict more business, because the coming season is so great. Ever haggled over a car or Christmas tree? Then you know how this works.
"It's the same dance every year," said Ross. "You don't show all of your cards at once."