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      in Television

      Madison Avenue’s Biggest Event Returns, to a Whole New World

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      In the three years since the television industry’s biggest companies pitched their shows to advertisers in person at the so-called upfronts, the entertainment industry has been flipped on its head.For the first time in three years, the circus is coming back to town.The television industry’s biggest showcase for advertisers, the so-called upfronts, will return to Manhattan landmarks like Radio City Music Hall and Carnegie Hall after the pandemic put the glitzy, in-person galas on hold. Just like in the old days, media executives will make their best pitch to persuade marketers to buy tens of billions of dollars of commercial time in the coming months.But thanks to the vastly changed media industry, many aspects will be radically different. The companies themselves have changed: CBS merged with Viacom and then renamed itself Paramount Global, and WarnerMedia and Discovery completed a megamerger, forming Warner Bros. Discovery. The tech giant YouTube is making its debut on the presentation lineup this week, and there is already intrigue that Netflix could join the fray next year.And instead of unveiling prime-time lineups that will roll out in the fall, media companies are expected to spend a large portion of their time talking up advertising opportunities on streaming services like HBO Max, Peacock, Tubi and Disney+. There’s good reason for that: Advertisers are now allocating closer to 50 percent of their video budgets to streaming, up from around 10 percent before the pandemic, several ad buyers said in interviews. The free ad-supported streaming platforms Tubi and Pluto were highlights for their owners, Fox and Paramount, in the most recent quarter.“The upfronts used to be ‘Here’s 8, 9, 10 p.m. on Monday night’ — I don’t think anybody cares about that anymore,” said Jon Steinlauf, the chief U.S. advertising sales officer for Warner Bros. Discovery. “You’re going to hear more about sports and things like Pluto and less about the new Tuesday night procedural drama.”Stephen Colbert during the 2019 CBS upfront. CBS merged with Viacom and then renamed itself Paramount Global since the last time it was featured on an upfront stage.John P. Filo/CBSThe courtship is no longer one-sided, when reluctant streaming platforms once put a stiff arm to commercials. As subscriber growth starts to slow for many streaming services, advertising — a mainstay of traditional media — is gaining appeal as an alternative source of revenue.Netflix, which resisted ads for years but is aiming to debut an ad-supported tier later this year after a subscriber slump, is expected to play a larger role in future upfronts. Disney+, which has so far continued to increase its subscriber count, said this year that it would also offer a cheaper option buttressed by ads.“Streaming is part of every single conversation that we have — there isn’t an exception based on who your target it is, because whether you’re targeting 18-year-olds or 80-year-olds, they’re all accessing connected TV at this point,” said Dave Sederbaum, the head of video investment at the ad agency Dentsu. Last year, ad buyers spent $5.8 billion on national streaming platforms, an amount dwarfed by the $40 billion allocated to national television, according to the media intelligence firm Magna. But television sales peaked in 2016 and are expected to decline 5 percent this year, compared with a 34 percent surge projected for streaming ad revenue as services offer more preproduced and live content.The rapid changes in viewing habits have caused many marketing executives to shift toward ads placed through automated auctions and “away from legacy models like upfronts” where “advertiser choice is limited,” said Jeff Green, the chief executive of the ad-tech company The Trade Desk.“As advertisers are seeing reach and impact erode from traditional cable television, they are focused on moving to premium streaming content,” he said during his company’s earnings call last week. “Increasingly, this is the most important buy on the media plan.”But streaming will not be the only topic at the upfronts — the events themselves will also be center stage.After two years of upfront pitches recorded from executives’ living rooms, buyers will fly into New York from around the country. They will shuttle among grand venues to watch presentations while seated alongside their competitors. Some venues are asking for proof of vaccination, while masks are a must at some; Disney is requiring a same-day negative Covid test.To many networks, hosting an in-person upfront was nonnegotiable this year.“This show cannot be too big,” Linda Yaccarino, the chairwoman of global advertising and partnerships at NBCUniversal, said she told producers of the company’s presentation at Radio City Music Hall on Monday. “Having everyone in the room together, there is no surrogate for that.”“Every single brand and marketer and advertiser comes in for the upfront week,” said Rita Ferro, the president of Disney advertising sales and partnerships. “It’s going to look and feel very different because it is very different — there’s so much more that we’re bringing to the stage.”Many of the week’s showcases will eschew a detailed rundown of nightly prime-time schedules and instead offer a more holistic view of available content platforms.Mr. Steinlauf, the Warner Bros. Discovery advertising chief, who is a veteran of several decades of upfronts, described changes that represent “the biggest shift of my career.” He said streaming was “the future, the new frontier,” and heavily watched athletic events were “the new prime time.” Warner Bros. Discovery will make its upfronts debut on Wednesday in front of 3,500 people at Madison Square Garden.Jo Ann Ross, Paramount’s chief advertising revenue officer, said that its event on Wednesday would “show a broader look.” She described it as a “coming-out party as Paramount” for the company formerly known as ViacomCBS.“It will feel different than what it was in the past,” she said.On Tuesday, Disney will abandon its usual upfront home at Lincoln Center and move to a space in the Lower East Side at Pier 36. The presentation will feature its three streaming platforms — Hulu, ESPN+ and Disney+ — sharing a stage for the first time. NBC Universal will highlight its technological capabilities, such as data collection, while also drumming up its Peacock streaming platform, even though the service already made a pitch earlier this month during NewFronts, an event for digital companies courting Madison Avenue.Linda Yaccarino of NBCUniversal said that “having everyone in the room together” this year for the company’s upfront was the only way to go.Tawni Bannister for The New York TimesThe competition could mean more demands from advertisers, like the ability to back out of commitments and lower thresholds for how much buyers must spend.“It’s basic economics — there are now more options available to media buyers and so you’re going to see a lot more willingness to be flexible,” said David Marine, the chief marketing officer of the real estate company Coldwell Banker.Potential headaches for advertisers this year could include Russia’s war in Ukraine, global supply issues and steep inflation, according to Magna. But low unemployment and other signs of strength from the U.S. economy, along with the coming midterm elections, are expected to feed a surge in ad spending.How the upfronts address those concerns, along with deeper movements in the industry, “will be telling,” said Katie Klein, the chief investment officer at the agency PHD.“There’s always going to be room for the upfront, there’s always going to be a need for it,” she said. “But it’s going to evolve as our industry is evolving.” More

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      in Movies

      New Era Begins at Warner Bros., Back Toward Its Entertainment Roots

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      With a new owner, the 99-year-old movie studio appears headed back to its traditional sweet spot as an entertainment company. But the business of Hollywood is no longer the same.LOS ANGELES — By 2018, almost every golden-age Hollywood studio had been conquered by outside forces.Metro-Goldwyn-Mayer had been tossed between disruptive owners for decades, never to fully recover. Columbia Pictures was sold to Coca-Cola in 1982 and then offloaded to Sony in 1989. Universal had weathered five outside takeovers in the span of 21 years. Paramount Pictures had been strip mined for cash by an ailing Sumner Redstone.Warner Bros. alone stood as Hollywood’s citadel, a beige-walled protectorate of filmmakers run by executives with institutional Hollywood knowledge.Then AT&T drove into town.The Texas phone giant took over Warner Bros. in June 2018 as part of a bid to “bring a fresh approach to how the media and entertainment company works,” as Randall L. Stephenson, then AT&T’s chief executive, put it at the time. As it set about building a Netflix-style streaming service, AT&T slashed and burned through the Warner Bros. ranks and installed leaders with little Hollywood experience. They cut costs, surprised stars with abrupt distribution decisions and pushed Warner to start behaving as more of a technology company and less of an entertainment one: It’s the future!“The telephone people had no understanding of Hollywood — and no passion for movies,” Robert A. Daly, who ran Warner Bros. in the 1980s and ’90s, said on Friday. “It’s the same mistake outsiders always make. It’s show business, show business, show business. They always forget that.”On Friday, AT&T handed off Warner Bros. to Discovery Inc. as part of a $43 billion merger.The 99-year-old movie studio, home to Harry Potter, Batman and Bugs Bunny, will now head in a different direction — back toward its traditional sweet spot as an entertainment company, or at least Hollywood’s newest mogul has vowed. David Zaslav, Discovery’s chief executive, will run the new corporation, which is called, with no small amount of symbolism, Warner Bros. Discovery.Already, Mr. Zaslav has vanquished tech leaders brought in by AT&T, including Jason Kilar, who made his name at Hulu and Amazon, and Andy Forssell, who came up through Oracle and Hulu. Also departing is Ann Sarnoff, who AT&T hired to run Warner Bros. in 2019 despite limited Hollywood experience. During her tenure, Ms. Sarnoff reworked the Warner Bros. shield logo, dropping the gold trim in favor of AT&T blue. On Friday, Mr. Zaslav restored the gold.Some Hollywood players never changed their acid position on Ms. Sarnoff — she’s not one of us — with film folk sniping about her delay in relocating to Los Angeles from New York. (With the pandemic ebbing, she bought Matt Damon’s old house in November, spending roughly $18 million.)Ann Sarnoff was hired to run Warner Bros. in 2019 despite limited Hollywood experience. She is leaving the post.JC Olivera/Getty Images for National Hispanic Media CoalitionIn contrast, Mr. Zaslav is already deep into a lavish restoration of Woodland, an estate in Beverly Hills where Robert Evans, the show business legend, lived for decades. Mr. Evans was known for orchestrating a creative rebirth at Paramount in the 1960s and ’70s, delivering era-defining triumphs like “The Godfather” and “Chinatown.”“Success is about creative talent, in front of the screen, and behind the screen, and fighting and fighting to create a culture that supports that creative vision,” Mr. Zaslav said when announcing the takeover. For much of the past year, he has rhapsodized about the studio’s rich legacy, repeatedly paying tribute to Jack, Harry, Sam and Albert Warner, “the brothers who started it all.”On Friday, Mr. Zaslav talked about his aspirations to “dream big and dream bold” in an email sent to his new employees. “Hallelujah,” one Warner Bros. manager said in a text message afterward. Another executive at the studio, speaking by phone, said she was going on a “wild” shopping spree to celebrate, adding, “Hollywood is back, baby.”Others were not so sure. Mr. Zaslav qualifies as an entertainment insider, having run Discovery, a cable television behemoth, for 15 years and working at NBCUniversal before that. But he has little film experience. The merger also comes with breathtaking debt — some $55 billion — that will have to be paid down, even as content costs rise. Mr. Zaslav will need to make difficult decisions about how to allocate resources. How much money should be spent on movie production and marketing? To what degree should the studio make movies for exclusive release in theaters? Should the focus shift even further toward supplying films to HBO Max, the company’s streaming service?Under Ms. Sarnoff, Warner Bros. slashed its annual theatrical output by nearly half and built a direct-to-streaming assembly line. “The good old days are gone forever,” one Warner-affiliated film producer said on Friday.Hollywood as a whole finds itself in a similar state of mind: optimistic about the future of movies one minute, pessimistic the next. There is evidence that theaters are finally bouncing back from the pandemic. Over the weekend, the PG-rated “Sonic the Hedgehog 2” took in a huge $71 million in North America, the biggest opening total for a Paramount movie since 2014, while “The Batman” (Warner Bros.) added $6.5 million in ticket sales, for a blockbuster domestic total of $359 million since arriving on March 4.At the same time, one of Hollywood’s most bankable directors, Michael Bay, sputtered over the weekend. His crime thriller “Ambulance” (Universal) arrived to just $8.7 million in ticket sales. In another bummer, “Morbius” (Sony) collapsed in its second weekend, collecting $10.2 million in the United States and Canada, a 74 percent decline.Some analysts liken the future of big screens to Broadway — still alive, but relegated to a corner of the culture. “The pandemic caused a phase shift in movie consumption patterns with audiences having moved decisively to preferring streaming services over the theatrical experience for all but the biggest, loudest, PG-13est films,” Doug Creutz, a Cowen analyst, wrote in a March 25 report.The result is a disoriented movie business. Run toward streaming. No, wait — we’ve got to keep theaters alive. Run the other way.Now, run both ways at the same time.The discombobulation at Warner Bros. started in 2016. That is when AT&T announced that it was buying the studio’s parent company, Time Warner, for more than $85 billion. The deal sat in regulatory limbo for 20 excruciating months, limiting the ability of Warner executives to make bold strategic moves. Moreover, Netflix was spending billions during that period to become the preferred home for film directors and marquee television producers. Amazon Prime Video was also making inroads.Mr. Zaslav’s catch-up strategy will soon emerge. To formulate it, he has spent months reaching out to people like Mr. Daly; Sherry Lansing, the retired Paramount superpower; Robert A. Iger, who retired as Disney’s executive chairman in December; and Alan F. Horn, who ran the Warner Bros. Pictures Group from 1999 to 2011 and then led Walt Disney Studios for nearly a decade.Their brain power was undoubtedly invaluable. But meeting with them also sent a clear message to Hollywood: I respect your culture.“The telephone people had no understanding of Hollywood — and no passion for movies,” said Robert A. Daly, who ran Warner Bros. in the 1980s and ’90s.Valerie Macon/WireImage, via Getty Images“For an industry of its substantial size, Hollywood is surprising insular,” Mr. Horn said on Saturday. “The creative community, in particular, needs to feel your respect. Artists need to know that you understand them and will do your absolute best to protect them.”Mr. Horn continued: “David’s willingness to go around town and seek the advice of dozens of people has spoken volumes. It’s how you build trust.”Mr. Zaslav will “work with a passion to rebuild the studio’s relationship with the creative community,” Mr. Daly said. “You’ve got to support the talent,” he added. “It’s a bit like children: Don’t spoil them too much, but make them feel loved.”Mr. Daly then waxed nostalgic about talent relations at Warner Bros. in the past. The studio used to send turkeys to stars at Thanksgiving. “It cost nothing, and it meant the world to them,” he said. There was also the time, in 1992, when Mr. Daly gave free Land Rovers to seven members of the “Lethal Weapon 3” cast and crew. “It cost us $320,000 to buy those Land Rovers, and we were criticized left and right for the expense,” Mr. Daly said. “Do you know what it got us? ‘Lethal Weapon 4,’ which made $285 million.”Mr. Zaslav seems to have taken notes. In February, when Los Angeles hosted the Super Bowl, stars like Charlize Theron and Jamie Foxx and prolific Warner Bros. producers like Greg Berlanti (“Riverdale,” “The Flight Attendant,” “You”) were invited to party in his suite at the new SoFi Stadium. Mr. Zaslav and his key lieutenants bought the suite with the intention of routinely wining and dining talent at football games, concerts and other major events.The stately Warner Bros. complex in Burbank, Calif., is the ancestral home of Humphrey Bogart (“Casablanca”) and Bette Davis (“Now, Voyager”). Mr. Zaslav intends to move into Jack Warner’s old office, a decision based on his stated desire to be near where “the magic happens.” The Warner Bros. administration building is near Soundstage 6, where one of Mr. Zaslav’s favorite movies, “The Maltese Falcon,” was partly filmed.Just one word to the wise, Mr. Zaslav: Don’t park in Clint Eastwood’s spot. He’s had it for more than 50 years and once used a baseball bat to knock out the windows of an interloping car.John Koblin More

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      in Movies

      Ann Sarnoff, Warner Bros. Chief, Is Set to Leave

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      LOS ANGELES — Ann Sarnoff, the chief executive of the WarnerMedia Studios and Networks Group, will leave the company, with an announcement coming as soon as this week, three people briefed on the matter said.Ms. Sarnoff, who declined to comment, was chosen to lead Warner Bros. in 2019 despite limited Hollywood experience, becoming the first woman to hold the role. She is departing as WarnerMedia, a division of AT&T, is set to complete a merger with Discovery. Ms. Sarnoff’s boss, Jason Kilar, who has been chief executive of WarnerMedia since 2020, announced his exit on Tuesday.Like Mr. Kilar, Ms. Sarnoff found herself without a seat in the game of musical chairs that accompanies the merging of competing companies, said the people briefed on the matter, who spoke on the condition of anonymity to discuss confidential information. The Warner Bros. Discovery management structure is still unknown, but David Zaslav, the chief executive of Discovery, who will run the new company, is expected to take over at least some of Ms. Sarnoff’s portfolio. She has had a dozen direct reports.Her job has involved oversight of HBO and HBO Max; the Warner Bros. movie and television studio; several cable channels, including TBS and TNT; and a large consumer products division. Breaking down the siloed nature of some of those units has been one of Ms. Sarnoff’s accomplishments.After news of her departure became public, Mr. Zaslav said in an email that Ms. Sarnoff had been “a passionate and committed steward,” leading “with integrity, focus and hard work in bringing WarnerMedia’s businesses, brands and work force closer together.” In an email of his own, Mr. Kilar called Ms. Sarnoff a “first-tier human being” and “the definition of a selfless leader.”Ms. Sarnoff’s job security has been the subject of Hollywood gossip for months, with agents and Warner-affiliated producers insisting that she was on her way out and some members of her team insisting the opposite. That kind of speculation can be deadly in show business, with whispers congealing into conventional wisdom, often resulting in an irrecoverable position of weakness in the view of Hollywood’s creative community.To be fair, Ms. Sarnoff, whip smart and affable, never got the opportunity to really do her job. The pandemic shut down the entertainment business roughly seven months after she started. AT&T, which hired her, decided to spin off WarnerMedia last May.Before joining WarnerMedia, Ms. Sarnoff held leadership roles at Nickelodeon, the Women’s National Basketball Association, Dow Jones and BBC America. More