How skittish is Wall Street about the TV advertising market?
Analyst John Janedis of UBS is expressing worry over what is odds-on the strongest part of the TV landscape — the sports market.
“Following comments from both Time Warner and Disney of a somewhat soft sports ad market, there’s understandable concern that the increased sports inventory across the marketplace has led to an oversupply of available spots that would pressure CPMs [cost per thousand viewers] over the long term,” Janedis wrote in a report Monday.
During Disney’s conference call with analysts Thursday, CFO Jay Rasulo said that ad sales pacing was down modestly at ESPN so far in the calendar fourth quarter. And that slowness comes despite the fact that there was an NBA lockout during the same quarter a year ago, meaning that ESPN has more higher-rated games to sell this season.
“Moreover, with increased hours of programming associated with recent rights deals, have the networks created an oversupply similar to what radio did a decade ago?” Janedis asked. “We don’t think we’re anywhere near that kind of situation, but the combo of the macro, adv. looking to cheapen the mix, more inventory, and viewer fragmentation are all trends worth watching.”
Janedis also remarked about the large number of new TV shows that have been launched in the past few weeks. “Since Labor Day, we think there have been at least 458 season or series premieres across television, a double digit increase over the same period in 2011,” he said. “We continue to focus on programming cost increases