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May 22, 2018

May 18th News Report from your Los Angeles Representative

Happy Friday everyone,

While the Cannes Film Festival was still making news this week, the trades dedicated the majority of their ink (and pixels) to the television upfronts which kicked off Monday in New York City. Upfronts are an annual ritual during which TV networks tout their new offerings to advertisers and kick off an all-important commercial sales period for the fall season.

It's no secret that traditional networks have been besieged by digital competitors. The broadcast networks have seen double-digit declines in viewing by the 18-to-49 age group most coveted by advertisers. Many cable channels are seeing audience erosion too, as pay TV subscriptions dropped by 3.6 million in 2017 and an additional 700,000 in the first quarter of 2018. Overall prime-time TV usage among the 18-to-49 age group is down 9% from last year, according to Nielsen.

These stats were all reported on the eve of the Upfronts, in last Sunday's edition of the Los Angeles Times, which took an in depth look at the challenges faced by those competing in an ever-changing distribution landscape.

At the end of the week, Variety provided a pretty comprehensive look at how the market shook out. As detailed below, the major studios ended upfronts with fewer orders for scripted series from Big Four networks and CW: 34 this year, compared to 37 at this point last year. The market also saw an increased emphasis on ownership as broadcast network parent companies increasingly lean on worldwide content licensing deals rather than advertising sales in first-run telecasts to drive profits.

In addition to crunching the numbers this week, Variety also offered a more general and very readable take on the takeaway trends. Details are provided below in "What We've Learned from the 2018 Upfronts".

An historical amendment has been added to the bill currently being considered by California's legislature to extend its film and TV tax incentives program to 2025. As reported in Deadline below, the change would require applicants to submit a written policy against sexual harassment and if approved, it would be the first time an anti-sexual harassment policy has been included in any state-sponsored film incentives program.

Finally this week, news that Ontario-shot shows like The Expanse and Designated Survivor would be canceled was taken in stride by industry stakeholders, but not so much by local media which seemed determined to react to alarm bells that never actually rang. CTV below was one of a multitude of media outlets that ultimately reported that the industry is well versed in TV life cycles and optimistic about its ability to attract new production.

Warmest regards,

Kelly Graham-Scherer
Los Angeles Representative
Toronto/ Ontario Film Office

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