CHANTILLY, VA. December 18, 2008
–
Political advertising couldn’t prevent the television industry from posting
-7 percent growth in 2008, according to the estimates of BIA Advisory
Services (http://www.bia.com),
a leading financial and strategic consulting firm serving the media and
communications industries. BIA’s fourth edition of the quarterly
Investing In Television® Market Report anticipates the downward
slide to continue in 2009, with -8.5 percent predicted. This year’s negative
results reflect not only the economy but stagnant ad spending that has
remained at $43 billion since 2000, representing a -0.4 percent compounded
annual growth rate. In 2010, with a recovering economy and several close
congressional races, a positive 6.4 percent return to revenue growth is
expected.
BIA estimates television station revenues
will hit $20.1 billion in 2008, the lowest in seven years. Across the
country negative revenue numbers were higher on the east and west coasts,
with -8.2 and -7.6 percent growth, respectively. The Midwest states fared
slightly better at -5.8 percent.
Station transactions aren’t expected to go
beyond $1 billion in 2008, on sales of approximately 65 stations, a large
drop from the past two years but an equaling to the levels of 2003-2005,
according to Investing In Television® Market Report. BIA
expects station sales activity levels in 2009 to remain equal to 2008,
primarily generated by financial decisions based on existing debt and
financing structures or strategic corporate objectives, coupled with smaller
ownership group bankruptcies or court-ordered restructuring.
“The
television industry needs to focus more on compelling cross-platform
advertising opportunities in order to significantly raise their revenues in
the coming years,” said Mark R. Fratrik, Ph.D., Vice President, BIA Advisory
Services. “With the steady improvement of their online and mobile presence
they now need to demonstrate to their advertisers the significant value
proposition they can offer through a bundled advertising package.” Fratrik
emphasized that BIA research for the NAB FASTROAD project (http://www.nabfastroad.org)
estimates that by 2012 an additional $1.1 billion in ad revenues alone could
come to local television stations from multicasting if they began delivering
news, information, and entertainment to cellular, mobile, and portable
handsets,
capitalizing on time-shifts in viewing patterns and the public’s
increased desire to download programming on devices other than their primary
televisions.
The
Kelsey Group (http://www.kelseygroup.com),
a division of BIA Advisory Services, recently convened a conference on
interactive local media, where the
consensus among panelists was that
traditional and online media are blending together, offering a tremendous
opportunity to capitalize on a multiplatform advertising approach. For
example, one panel discussed how NBC, Comcast, and CBS Radio collaborated on
a successful Great Used Car Sale Campaign in Chicago utilizing the different
forums these competitive firms offer. The 10-day event generated 26 million
online impressions. Going forward, television can certainly embrace similar
strategies to extend its presence in more sophisticated ways.
Kelsey’s Peter Krasilovsky, vice president
and program director of marketplaces, expects to see television ads act as
differentiators for leading online services because of its broader scale and
ability to reach more people than new media. “In 2009 look for cross media
bundles bringing together television, radio, newspapers, and online services
as a way to improve overall revenues,” says Krasilovsky.
The
chart below shows broadcast television percentage revenue change from 2000
and BIA’s projected revenue change for the coming four years.
Fratrik notes that the value of television stations will be a challenge for
stations and groups in the foreseeable future.
“Stations that need valuations or assessments for financing or purchases are
walking a tightrope right now,” said Dr. Fratrik. “The industry needs to
keep its revenue in balance while investing properly in its future for
longer-term growth.”
BIA posts a monthly update of television
station values and transactions on its web site at
http://www.bia.com/resources_trends.asp.
A comprehensive profile of all 210
television markets (plus Puerto Rico) and television market projections
through 2012 are available in the fourth quarter edition of Investing In
Television® Market Report published by BIA Advisory Services
and the 2008 Investing In Television® Ownership Report.
Both publications are part of the Investing In
financial guide series that includes market trend analysis,
demographic and economic overviews, competitive overviews, technical data,
ownership data, pending and completed transactions, and Arbitron ratings.
Information on these publications is available on the BIAfn website
at
http://www.bia.com/publications_reference_tv.asp.
BIA also provides the
Investing In Television®
Pocket Guide, a convenient, abbreviated
portable reference guide to all of the television markets. The compact
design of the guides allows readers to rapidly
identify key markets and important station details. BIA also
publishes investment reference guides and provides data services for the
television and newspaper industries. For more information, call 800.331.5086
or email
info@bia.com.
About
BIA Advisory Services, LLC
BIA
Advisory Services, LLC, a subsidiary of BIA Financial Network, provides
research, data, analysis, and financial and strategic consulting to media,
telecommunications, technology, directory publishing, and local search
companies. BIA Advisory Services includes The Kelsey Group, experts in
traditional and online local media and advertising; BIA Research, providers
of competitive and comparative market information and analysis through data
services, specialized reporting, engineering studies and mapping; and BIA
Consulting, specialists in business intelligence and corporate growth
strategy, and the nation’s leading communications appraisal and valuation
firm. Additional information is available at
www.bia.com.
About The Kelsey Group
The
Kelsey Group, a division of BIA Advisory Services, LLC, is the leading
provider of research, data and strategic analysis on directories,
small-business advertising, online local media, vertical
market advertising and mobile advertising. As the premier analyst
firm covering the directory publishing community and the emerging local
search marketplace, The Kelsey Group provides advisory services (The Kelsey
Report®, Interactive Local Media and Marketplaces),
publishing (Global Yellow Pages™), consulting (more than 400 individual
assignments) and conferences (74 events). For more information about The
Kelsey Group, visit
www.kelseygroup.com.
