Equity watchdog sees tough 2009


Private equity firm Veronis Suhler Stevenson (VSS) expected at one time that the media and communications industries would enjoy growth of about 4.9% in 2009. The unsurprising news is that it no longer holds onto that expectation, but still thinks they will get through the year with only mild slippage, coming home -0.4% in the red. The good news is that such a result would compare favorably with what appears to be in store for any number of other industries. The bad news is that the advertising component of that guesstimate comes in at -7.4%, and that’s more or less what VSS is expecting out of broadcast categories.

The bad news is that television and radio do not figure to be among the relatively flat media categories. Broadcast television is expected to drop -9%, and combined broadcast and satellite radio is expected to drop -7.2%. The duo can take heart that they aren’t newspapers, however, which VSS sees plunging -16.2%. Consumer magazines are more or less in the same boat as the broadcast categories, looking at a -8.5% decrease.
Newer platforms, including mobile, the internet and games are expected to continue to grow, although at a slower pace.

“The downturn in our economy resulting from the financial markets collapse has added pressure to the secular trends already present and has accelerated the down pressure on the traditional segments of the consumer advertising and marketing services sectors,” John Suhler, Co-Founder and General Partner of VSS. “However, the newer or what we have labeled the alternative segments of both sectors continue to experience positive growth in ’08 and ’09 and the end user sectors, both consumer and institutional, representing the majority of spending in the communications industry, have been revised to show slower but positive growth, also in both years."

RBR/TVBR observation: Being a player on the internet isn’t limited to internet companies, and station websites have been perhaps the one consistent growth area for broadcasters over the past few years. Stations should continue to seek new ways to use websites, not just as an enhancement of the broadcast stick, but as a standalone money-maker in its own right.