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.
A secondary hit will happen when major US sports begin to go online, and in some cases, direct to consumer, lower the interest in live broadcasts. European advertising markets will mimic this behavior later, and slowly so will all TV advertising markets around the world.
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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