TV Station Advertising Up In '06, But '04 Was Better
"Unfortunately, we had automotive advertising that had been strong in years past," said Mark R. Fratrik, vice president of BIA Financial Network, a Chantilly, Va.-based financial advisory firm that came up with the numbers. "We don't have that as much from autos anymore."
Local TV advertising periods still rise and fall according to a two-year cycle--all because of the increases in political and Olympic TV advertising in even-numbered years. While the even-numbered years are still good, the odd-numbered years are getting weak.
That's why comparing 2006 with 2005 isn't a true barometer. A better comparison is looking at 2004--which shows a somewhat bleaker picture. This year, 2006 is poised to be down $300 million, or about 1 percent, versus 2004.
"What I'm seeing is that in the future for the odd-numbered years, you are not going to have any growth," said Fratrik. For example, last year--2005--was off 8 percent versus numbers in 2004.
The good news is that the economy is doing well, says Fratrik. "You have a decent economy. First-quarter U.S. growth is 4.5 percent. But gas prices are going up as well."
Future growth from TV stations must come from new sources of revenue--the selling of digital multicasting signals to other programmers, revenue from retransmission consent, and Internet deals, said Fratrik.
In the future, BIA says that certain small broadcasters may be able generate up to 25 percent of their revenue and 40 percent of their cash flow from these new applications.
The biggest revenue-producing TV station group in 2005 was Fox Broadcasting, with $2.3 billion in 2005--which has held the top spot for a number of years. CBS-owned stations come next at $1.9 billion; then NBC at $1.6 billion; Tribune Broadcasting is at $1.17 billion and ABC is at $1.15 billion. Fox always pulls in the most revenue because it owns the largest market stations--nine of the top 10.