Station Revenues Down $5.5 Billion From 2006-09: SNL Kagan
But Report Says Rosy Retrans Forecast Will Give Stations Boost
John Eggerton -- Multichannel News, 2/8/2010 11:14:14 AM
Between 2006 and 2009, TV station revenues fell over $5.5 billion dollars, according to a new report from SNL Kagan, from $24.6 billion to under $19 billion.
By 2013, Kagan predicts TV station revenues will only have recovered about half of that drop, to $21.7 billion. "While still below 2006 levels," says the report, "our analysis indicates an industry with positive momentum."
That's in part because the good news is that Kagan predicts the increase in retransmission-consent and online revenue, while still only a relatively small fraction of the total pie, will lead to a healthier future.
The report also estimates a 5%-7% boost in ad spending this year, which Kagan calls conservative and adds could increase further if auto comes back and political "delivers on some early promise." A Supreme Court decision allowing direct funding of campaign ads by corporations and unions could help boost the latter, unless it is undone by unhappy legislators and the Obama administration.
According to Kagan predictions, retrans revenues are expected to increase from just 1% of the total in 2006 to 9% in 2013, with online increasing from 2% to 7%.
Continuing the rosy retrans outlook, the report says networks should benefit from O&O retrans, plus a potential share of higher affiliate fees -- networks are increasingly talking about getting a cut of broadcasters increases in retrans, arguing their prime time is a big driver of station value.
Kagan says the networks would turn around and invest more in scripted dramas, which help with news lead-ins (as opposed to Jay Leno at 10 p.m.), and to more investment in sports rights, which are huge ratings winners.
That last may be a bit of wishful thinking given the steady migration of a lot of sports from broadcast to cable -- college bowl games, golf, Monday Night Football, All-Star games and NASCAR.
Other advertisers looking to drive buzz on top of their ads may need to work a bit harder to navigate around the controversial content.
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