The advertising market has been declining over the past six months and has worsened in recent weeks, according to NBCUniversal CEO Jeff Shell, who on Monday discussed how economic pressures including inflation, recession and uncertainty have hit the TV industry, and what all that could mean for 2023.

“It’s gotten even worse, really, in the last month or so,” said Shell, speaking at UBS’s December Global TMT investor conference. “It’s actually hard to figure out whether that’s because of macro conditions—whether people’s businesses are worsening—or because people are just uncertain.”

This year’s upfront negotiations were defined by the word “flexibility” as multiple media buyers previously told Ad Age that advertisers were pulling back on or re-working upfront commitments with greater frequency than in years past. Shell said he believes the recent dip in advertising spend is mostly preparation for the worst, rather than an indicator of declining business, given that pricing on ad inventory has remained high.

The main on-the-ground evidence, according to Shell, is a lag in receiving cash. 

“Cash for the advertising is coming in late,” said Shell. For example, he explained, NBCU would typically receive the funds for advertising in a broadcast of “Sunday Night Football” as much as a month in advance. Now, “It’s coming a couple days before,” said Shell.

Shell noted that in NBCU’s fourth quarter, “we’re seeing some weakness” due to a dip in ad revenues as marketers “are holding back.” Part of that dip has been due to a weak scatter market—i.e., short-term ad buying. The other reason Shell cited for the weak quarter is consumer cord-cutting. While linear TV is “still a giant business,” according to Shell, he also admitted that the peak of returns from cable subscriptions has passed.

“I’m still bullish that we’ll continue to see [advertising] price increases,” said Shell. “It’s just that cord-cutting now is at a level where those price increases are not going to offset from a total amount—you’re still going to see declines in subscription revenue.”

Where Shell hopes NBCU will be able to increase revenue is through its streaming platform Peacock, which he announced has reached 18 million paid subscribers (i.e., those with a premium subscription rather than a free or bundled one)—3 million higher than the figure the company reported in its third-quarter earnings in late October.

Among those users, usage time for Peacock is about 20 hours per month, Shell further explained, generating an average revenue per user of $10. “That results in a business that on a run-rate basis is doing over $2 billion revenue already,” said Shell, despite Peacock being only 2 1/2 years old.

He said the secret to Peacock’s fast growth is its ability to leverage content from across the NBCU universe. For instance, 28% of Telemundo’s “World Cup” audience is streaming on Peacock, and NBCU pulled multiple franchises, like “The Real Housewives,” from Hulu. Notably, Peacock made Nielsen’s streaming “Top 10” list for the first time in October when it debuted “Halloween Ends,” viewed for 717 million minutes in its first three days on the service.

In the end, Shell struck a note of (relative) optimism as he put the current market in context. “If the advertising market is bad compared to the way it was a year ago or two years ago—which was historic highs—it’s just not that bad,” said Shell.