4% Q1 Ad Revenue Rise Better Than Expected

Increase is smaller than Q4 gain
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With the media companies finished reporting calendar first quarter earnings, analyst Michael Nathanson of MoffettNathanson Research calculates that advertising revenues rose 4%.

That number is significantly more than the 1% rise Nathanson had forecast. And if you take out Walt Disney Co.’s cable networks, including ESPN, ad revenues grew by 6%. (ESPN’s ad sales were down 13% because six college football bowl games moved from New Year’s Day to New Year’s Eve.)

Whether or not you include Disney, the first quarter increase was still smaller than in the fourth quarter, when ad revenues were up 7%. 

The broadcast networks were up 7.7%. Cable was up 1.4% (or 3.8% if you discount Disney).

Thanks to Super Bow 50, CBS was the big winner. In cable, both Scripps Networks Interactive and 21st Century Fox posted double digit gains.

With a hot scatter market, most company’s ad sales up were despite lower ratings. For example, Discovery’s ratings were down 8.2% but ad revenues grew 7.2%—the biggest gap among the cable programmers. Looking at it that way, Viacom’s 5% drop in ad revenues could be seen as a small positive because ratings in the demo were down 7.3%.

Looking ahead, “bullish commentary on continued scatter strength ahead of the upfront suggests more positive data points for the next quarter, though we are more cautious on the back half of the year with the Olympics, the political debates and the comping of last year’s daily fantasy sports ad infusion in the marketplace,” Nathanson said.

(Photo via Ervins Strauhmanis's FlickrImage taken on Sept. 19, 2014 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)