May 13 (Reuters) - As television executives prepare

lavish stage presentations in New York this week to dazzle

advertisers during the annual TV upfront sales season, a harsh

economic reality looms offstage -- digital video advertising now

eclipses spending on traditional television ads.

The shift in spending and competition from tech players like

Amazon ( AMZN ) has taken a toll on media companies' financial

results, raising the stakes for the annual showcase of TV

content to attract spending commitments from advertisers.

"We've definitely seen that audience erosion in linear TV in

certain pockets -- especially more so in entertainment," said

Nicole McCurnin, director of advertising insights at ad tracking

firm Guideline. "But I do see, broad strokes, ad companies'

attention is just going more so towards those digital

platforms."

Digital video refers to a broad category of TV alternatives

that includes paid streaming services like Netflix ( NFLX ),

social video platforms such as TikTok, free ad-supported TV

offerings like Pluto TV and cable replacement services including

YouTube TV. It will account for an estimated $62.9 billion in

U.S. ad spending in 2024, according to an April report from the

Interactive Advertising Bureau and Guideline.

That represents 52% of the projected spending on video

advertising this year, reflecting a change in viewing habits

nearly two decades in the making.

Walt Disney ( DIS ), Warner Bros Discovery ( WBD ), Fox

and Comcast's ( CMCSA ) NBCUniversal all reported

declines in domestic television ad revenue in the most recent

quarter, though NBCU's exclusive streaming of an NFL Wild Card

game on its Peacock service helped fuel revenue, offsetting

those declines.

Many of the streaming services launched to capitalize on

changing consumer viewing behavior "are still bleeding cash

while declines in the traditional television business

accelerate," said Richard Greenfield, media analyst at LightShed

Partners. "They simply pivoted too late."

The fragmenting of the video landscape is well understood --

and media companies like NBCUniversal have developed new

advertising tools that let marketers' messages ride along with

their content, wherever it appears. For example, a T-Mobile ad

featuring U.S. TV show "Saturday Night Live's" Chloe Fineman

could air during the live network TV broadcast of "SNL," appear

the next day on NBCU's Peacock streaming service and show up on

social platforms like X, TikTok and YouTube.

"Regardless of where that person is who's in your target ...

you can go follow them, wherever they are," NBCUniversal global

advertising chairman Mark Marshall told Reuters. "The technology

and capability just wasn't available until this year."

Ahead of the upfront advertiser presentations, Disney ( DIS ) and

Warner Bros Discovery ( WBD ) announced they would combine their

Disney+, Hulu and Max streaming services this summer in a bundle

of programming reminiscent of cable television. Such a

combination might reduce subscriber cancellations and perhaps

coax money-losing competitors to follow suit, analysts said.

"We view a re-bundling of traditional media content on

streaming platforms as a key to making the space investable

again," wrote TD Cowen's Doug Creutz.

Meanwhile, digital rivals Amazon ( AMZN ) and Netflix ( NFLX ) are hosting

their own advertiser presentations in New York -- the Seattle

retail giant, for the first time -- to capture shifting ad

dollars.

Amazon ( AMZN ) launched ads within Prime Video for all customers in

January, requiring users to pay for a higher-priced tier to

remove ads. The move will boost Amazon's ( AMZN ) revenue and likely come

at the expense of traditional TV companies' revenue, said Brian

Wieser, a longtime ad industry analyst, in a March report.

Media companies are also tying up with tech giants to sell

more ads. During a presentation to advertisers last month,

Google announced that brands would be able to buy ad space with

media companies like Paramount and Warner Bros Discovery ( WBD ) through

Google's automated tech tools, rather than working with

salespeople.

"I think we're going to hear more about programmatic ...

particularly as consumption shifts to the digital and streaming

ecosystem," said Samantha Rose, strategic investment lead at

Horizon Media, referring to the upfront presentations.

(Reporting by Dawn Chmielewski in Los Angeles, Sheila Dang in

Austin; Edited by Kenneth Li in New York)