SNL Kagan Sees TV Ad Gains

Cable expected to grow while broadcast stays flat

After two tough years for advertising,
some segments of the television market are bouncing back, including local TV
stations, cable TV and network TV. But over the long term, the outlooks for
those segments are very different.

According to a new report from SNL
Kagan, advertising revenue at broadcast TV stations will jump 15% to $18.8
billion in 2010. That follows a 22.4% plunge in 2009. Cable, which nearly
survived the downturn with only a 4.2% drop in 2009, is expected to grow 8.9%
to $27.7 billion in 2010. Broadcast networks are expected to see a gain of 5.1%
to $19.1 billion following a 7.7% drop in 2009.

TV syndication and barter are slated to
see a 2.1% drop to $2.8 billion, according to Kagan. Syndication dropped 4.5%
in 2009.

Overall, Kagan expects U.S. advertising
to grow 2.8% in 2010, with big gains seen in "new media" such as mobile and the
Internet, while some more traditional media, including newspapers, business
publications and yellow pages, continue to take hits.

Looking further ahead, SNL Kagan
projects that cable TV advertising will jump to $30.2 billion in 2011 and to
$41.6 billion in 2015. On the other hand, SNL Kagan sees some shrinkage in
broadcast, with advertising revenue in 2011 coming in at $18.9 billion, and
slipping further to $18.8 billion by 2015.

Revenue at broadcast stations is also
not seen as growing much long term. SNL Kagan projects sales of $18.1 billion
in 2011 and $19.4 billion in 2015.

By comparison, Internet
advertising, pegged at $24.9 billion in 2010, is forecast to hit $30.2 billion
in 2011 and $43.1 billion by 2015.

SNL Kagan says cable's strong outlook
is due to "the large audiences that have shifted from broadcast to cable, as
well as the massive investment many cable nets are making in original
programming."

Budgets for primetime programming at
the leading cable networks now rivals spending at the broadcast networks.

"This is causing viewers to perceive
many cable networks as on par with the broadcast networks in terms of quality,"
SNL Kagan says.

At the same time highly viewed sports
programming is also migrating to cable, SNL Kagan notes.

"This trend is only likely to continue
once the Comcast Corp./NBC Universal merger closes, as we believe Comcast's Versus
may have access to more programming from the massive array of sports rights NBC
has amassed," the report says.