Are TV Ad Dollars Going To Few Players?

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BIA/Kelsey today will release its latest report on where local TV broadcasting stands from a dollar perspective.


Among the key findings: Some 18 television owner groups account for more than 80% of total industry revenue.

What’s the revenue total when factoring in over-the-air and online advertising revenue, retransmission consent and other revenue?

According to BIA/Kelsey, local TV will approach $31 billion in total gross revenue in 2016.

That’s a main takeaway from the new report “Television Broadcasting 2016: Current Assessment and Future Outlook,” which indicates that the local TV dollars will see the big four O&Os generate $6.1 billion in gross over-the-air (“OTA”) television advertising revenue and $9.3 billion in television station gross revenue in 2016.

At the same time, some $6.4 billion in OTA ad television revenue and $9.9 billion in gross TV revenue for the six publicly traded broadcasters profiled is anticipated.

television-station-revenue-distribution-by-owner-typeAdditionally, some $4.2 billion in OTA TV revenue and $6.6 billion in gross TV revenue for the eight large privately held groups.

“It’s incredible that 18 groups that represent just over 50% of the number of commercial stations earn over 80% of the revenue for the entire industry,” said BIA/Kelsey CEO Tom Buono. “These 18 groups, competing against each other in the local markets, generate a large share of the total local television station industry revenue through the operation of strong affiliates in these local markets.”
Of the $25.8 billion in gross revenue generated by these groups, $6.5 billion will be generated from retransmission consent revenue and over $1.1 billion will come from online/digital activities.

In its recent U.S Local Advertising Forecast 2017, BIA/Kelsey reported that total online/digital advertising in 2016 will be approximately 31% of total local advertising.

Traditional media and television operators, in particular, are continuing to face competition from digital platforms causing media shares to continually adjust as online attracts a bigger share of advertising dollars.

The 45-page report examines the current environment for television broadcasting and factors that will drive the industry going forward. Among the factors are trends in local advertising and the shift to digital; political advertising; retransmission consent; the spectrum auction; ATSC 3.0 and much more.

It also includes an assessment of what the television industry and its potential value in 2020.

What does BIA/Kelsey believe? The value of the television broadcasting industry could approach and perhaps exceed $100 billion in 2020.

“Considering the industry’s current position, and weighing all the factors that are expected to influence it over the next few years, BIA/Kelsey expects the television station ownership business to prosper and be even stronger in 2020 than it is today.”