SNL Kagan Sees TV-Station Revenue Growth
Financial-Research Company Predicts 3.9% Compound Annual-Growth Rate Over Next Five Years
By John Eggerton -- Broadcasting & Cable, 6/17/2008 11:38:00 AM
Financial-research company SNL Kagan predicted that TV-station revenue will record a compound annual-growth rate (CAGR) of 3.9% over the next five years.
That would be coming off a big decline -- 8.5% -- in 2007, which Kagan attributed to the writers' strike and the migration of ads to the Internet.
But that five-year percentage gain will be front-loaded, with Kagan predicting an 8.8% boost in local-TV ad revenues in 2008, driven by campaign spending.
That's according to SNL Kagan's most recent long-term revenue projections, which take into account "broadcast-revenue trends, market demographics and expected ad revenues from the presidential election."
Kagan predicted that the major growth in revenues over the next five years will come from the Pacific and Mountain regions, especially large metro areas with hefty Hispanic populations -- Las Vegas and San Diego for example, with CAGR of 6.2% and 6.1%, respectively, followed by Los Angeles (5.7%), Phoenix (5.6%) and San Francisco-Oakland-San Jose (5.6%).
On the other end of the spectrum are the Great Lakes and Central regions, with a projected 2.7% revenue growth in the Great Lakes markets over five years, the lowest growth region, thanks to auto-industry layoffs and slow retail growth. The Central region is projected to grow only 2.8%, with the Mississippi markets particularly hard-hit as they continue to rebuild from Katrina.
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