TV Futures: Double-Digit Price Gains, Single-Digit Revs
On the eve of TV's upfront advertising market, a new survey expects possible double-digit percentage gains in program prices for broadcast and cable networks -- but only single-digit gains in total revenue volume.
A JP Morgan survey said 60% of respondents see double-digit percentage cost-per-thousand (CPM) price growth in broadcasting, with 55% saying that cable networks will also get to those levels. Morgan said these results confirm the strength of the scatter market, which has been rocketing up 25% or more.
Last year, in one of the rare times for the upfront market, CPMs declined anywhere from 2% to 10% depending on the network, all because of a deep recessionary economy.
While program prices seem to be growing fast, total volume may not keep pace with those same levels.
Forty-five percent of those surveyed said total volume growth will be in the single-digits percentage gains for both cable and broadcast. While 35% believe cable could grow even faster, rising by 10% or more, only 5% said broadcast could attain that level.
Last year, the broadcast prime-time market was pegged, according to estimates, at around $6.2 billion to $6.5 billion -- down almost 20% from the year before. Cable's upfront, which is calculated for all dayparts including prime time, was down 12% to around $6.6 billion to $6.8 billion.
When asked about the fastest-recovering advertising categories, pharmaceuticals and telecommunications had the most mentions from respondents. The slower-recovering areas were financial services and travel.
Overall, the survey noted that for all advertising in the second half of 2010, respondents were split when it came to whether the market will grow by single-digits or double digits -- with 35% of respondents seeing single-digit growth and another 35% seeing double-digit growth.
Print media continues to suffer. Over half of respondents said pricing this year is lower than in 2009. Only 8% of those surveyed pay higher rates for newspaper ads, and 13% for magazines.