Q4 Broadcast Ads Up 4.7%, Early 2014 Scatter TV Down

Declines in scatter market dollar volume will continue in the first quarter of 2014 -- partly as a result of NBC's Winter Olympics siphoning dollars away from other TV networks, as well as heavy upfront sales made last year.

Michael Nathanson, media analyst of MoffettNathanson Research, writes that “for the first time in recent memory, some media executives, blaming softer scatter and weak ratings trends, publicly talked down fourth-quarter advertising expectations.” He said that first-quarter advertising and ratings could also sink to some extent.

Overall, fourth-quarter national TV advertising is now projected to be up 4.7% versus an earlier estimate of 5.9%. Broadcast networks -- excluding NBC -- are expected to be up 2.8%, says Nathanson. Fox will be 5% higher; CBS, 4.0%; and ABC down 1%.

Looking at cable networks, he expects national advertising on these networks to rise 4.7%. The leaders here: AMC, up 32%; Disney, 7% higher; Scripps Networks Interactive, improving 6.5%; 21 Century Fox, up 6%; Discovery, adding 5%; NBCUniversal, gaining 4%; and Time Warner, adding 3%.

“While we expect slowing scatter to limit future earnings surprises and cause the gap between advertising and target demo ratings to shrink, we believe that fourth quarter is somewhat protected because of layering of upfront increases on a seasonally low scatter inventory,” Nathanson says.

Adding to this is the deferral of makegood inventory into latter quarters of the broadcast season.

Looking at fourth-quarter C3 ratings (commercial ratings plus three days of time-shifting, for adult 18-49 viewers in primetime) broadcast networks were up slightly year-to-year 0.8%, with organic cable network growth down 1.5%, says Nathanson.  

Fox’s World Series programming, as well as higher NFL programming overall, were the main reasons for broadcast’s gains. Fox grew 10.7% during the period among 18-49 viewers in C3 ratings, while NBC gained 1.1%; ABC was down 2.1%; and CBS dropped 4.3%.

"Watching TV" photo from Shutterstock.

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