Between 2006 and 2009, TV station revenues were down over five
and a half 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 retrans and online revenue, while still only a relatively small
fraction of the total pie, will lead to a healthier future.
It is also because the report estimates a 5-7% boost in ad
spending this year, which Kagan calls conservative and adds could increase 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 its predictions, retrans revenues are expected
to increase from just one percent 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
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,
the report suggests), and to more investment in sports rights, which are huge
That last may be a bit of wishful thinking given the
migration of a lot of sports from network to cable--college bowl games, golf, Monday Night Football, All-Star games,
Other advertisers looking to drive buzz on top of their ads
may need to work a bit harder to navigate around the controversial content.