How and when traditional TV advertising value collapses
“slow dwindling of pay TV subscriptions, starting in the more advanced markets of North America and Europe, but gradually infecting Asia Pacific and Latin America”
Predictions reveal two price corrections in the next 5 years due to the effect of subscription video on demand (SVoD), and the emergence of original content on pay TV subscriptions, and on ratings which essentially drive broadcast advertising revenues.
US broadcasters have been making their advertising more and more expensive to satisfy their shareholders, but the rate of price increases cannot be sustained.
This forecast sees US broadcast TV advertising taking the hit first, a full 20% softening in price, only cushioned by some improved uptake of Addressable advertising. This fall will occur over 2019 and 2020, caused by the rising tide of SVoD and vMVPD viewing, which sees broadcast ratings plummet even further.
This will come home to roost in a collapse in advertising value late in 2019 and early in 2020. At the same time, more US homes will cut the cord, resulting in fewer pay TV homes, and more and more advertising opportunities with long form digital Virtual MVPDs and others.
Fewer viewings, watched less often leads to a weak market and uncertainty and this in turn leads to sports rights shifting to online properties and in some cases “going it alone” in a direct-to-consumer strategy.
This in turn leads to a further ratings collapse and more cord cutting, and a fragmenting of advertising opportunities which plays to the advantage of the online duopoly – YouTube and Facebook, and undermines advertising value.
Who should buy this report:
Anyone who’s business or work relies on the way the TV industry is today, needs to read this report urgently. Advertising has been kept from collapse by simply raising prices, but this cannot continue to work, and this will effect the advertising chain, pay TV subscriptions, advertising agencies, technology suppliers, such as advertising insertion and decisioning specialists and addressable and programmatic exchanges as well as buy side and sell side systems. Broadcast and Cable networks should see the coming changes for what they are and plan their survival accordingly. All thee businesses need to view this report at the C Suite and senior management level urgently.
This report illustrates how:
- Over $200 bn of TV Advertising will transition to online
- Shows who will absorb it apart from Google and Facebook
- Indicate falls in values of the protagonists around the globe
- Global TV Advertising will dip and transition to Online in each market
- How much of the TV market Google and Facebook can expect to inherit
- Point to the likely financial values of the protagonists around the globe
Companies mentioned in this report:
ABC, Alibaba, Amazon, Apple, AT&T, Baidu, BAMTech, BBC, beIN Sports, Benfica TV, Bundesliga, CBS, Comcast, DAZN, Deutsche Telekom, DirecTV, Discovery, Disney, Dorna Sports, ESPN, Facebook, fuboTV, Formula 1, Fox, Gracenote, GolTV, Google, Hulu, International Tennis Federation, iQiyi, Major League Baseball, MoffettNathanson, Movistar, NBC, NFL, Nielsen, Netflix, Orange, ProSiebenSat, Roku, Showtime, Sky, Telefonica, Tencent, Time Warner, Twenty First Century Fox, Ubisoft, Univision Networks, Verizon, Vodafone, Yokou, YouTube, YouView
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