Next month's TV ad-sales market known as the "upfront" could expose some telling change on the media landscape.

While the upfront used to be about which network was pulling in the most dollars, this year could show how the TV sector is faring against the advances of the Internet. And on that front some media watchers aren't optimistic.

Dollars are starting to stream into the pockets of online players. Nielsen Monitor-Plus reported last month that between 2004 and 2005, online spending grew more than 23% while network TV spending dropped 1.5%.

That's not great for an industry already under fire from dissatisfied marketers looking for quantifiable return on investment. TV executives have a hard case to make as ad-skipping devices proliferate, consumer attention spans shorten and online video quality rises.

Enter the Internet, which provides media buyers with the data that marketing gurus cherish. The recent emergence of high-quality streaming video and other new online applications could help Web-based players such as

Yahoo!

(YHOO)

,

Google

(GOOG) - Get Report

,

Time Warner's

(TWX)

AOL and

Microsoft's

(MSFT) - Get Report

MSN draw a little lucre out of TV marketing budgets ahead of this spring's TV market.

The Internet has only recently emerged as a force that has the potential to grab a serious chunk of change out of the network kitty. Last year it shaved off a few hundred million dollars out of a $9 billion-plus total of business written in upfront commitments. The upfront was off 2004 levels, and a repeat would not be welcome among those who tout television's unparalleled reach and effectiveness.

This year, the Internet threatens to take a much larger piece of the advertising pie, according to some advertisers and analysts. That won't be music to the ears of executives at

Disney's

(DIS) - Get Report

ABC,

GE's

(GE) - Get Report

NBC,

News Corp.'s

(NWS) - Get Report

Fox or

CBS

(CBS) - Get Report

.

"Given the lackluster trends year to date, we enter the annual upfront season with typical cynicism," wrote Merrill analyst Lauren Rich Fine in a note Monday. "Marketers are increasingly anxious to establish an online presence, so we expect the networks to offer integrated on-air and online inventory which could also help satisfy concerns about TV's effectiveness."

Indeed, the networks will scramble to figure out how they can mitigate loss and capitalize off the Web by selling programs online and developing extensive companion Web sites for their shows. That may not be enough to stop the bleeding, though.

One chief executive of a large media-buying company told

TheStreet.com

recently that he sees the networks taking a 7% to 9% hit on upfront sales -- directly to the Internet. That could amount to $1 billion in shifting dollars. Merrill Lynch forecasts 2006 ad spending could climb 3% for network TV, while Internet ad spending should surge 28%.

Jordan Breslow, director of national broadcast research at Grey Global Group's Mediacom, says that companies that drive traffic to an advertiser's homepage through portals like Google and Yahoo! could see a boost from migrating dollars. As well, marketers who already have a presence on a particular destination might identify those places to make incremental spends. "You can spend on location, such as wherever you happen to be currently and upgrade from banner ads to streaming video," Breslow says.

Rich Fine says, "Traditional media seems to be getting better at harnessing their online assets and/or accumulating more." Clearly, networks like NBC and CBS are rushing to make sure that their product is also featured on the Web in a way that is beneficial to the needs of their advertisers. The Turin Winter Olympics and the NCAA men's basketball tournaments serve as recent examples of network online muscle.

That said, "Traditional media continues to be on the losing end of most of the budget shifts," the Merrill analyst adds. "It is hard to say if we have really reached bottom in the secular shift, and as an educated observer, we think we have not."