• by Wayne Friedman , September 6, 2022

Growth for this year’s traditional TV and advertising video-on-demand (AVOD) ad revenue is projected to be up just 4.3% to $84.2 billion, according to MoffettNathanson Research -- down from an early estimate of 6.5%.

This is largely attributable to the softer results of AVOD services including Hulu, Roku, Pluto, and Tubi.

Yearly growth for this group is now estimated to be up 29% (vs. 44% in an earlier estimate) to $9.8 billion.

This is a result of a weakening -- but not necessarily recessionary -- economy, which has shown itself in national TV’s near term scatter market deal-making, down by double-digit percentage versus a year ago, according to analysts.

“Marketers are using AVOD for incremental reach beyond linear TV,” according to Michael Nathanson, senior research analyst at MoffettNathanson Research. “As such, it appears AVOD is the first to be cut under macro pressures as marketers decide to consolidate their spending on higher quality linear networks.”

Second-quarter 2022 results show AVOD was up 27% to ($1.8 billion), witnessing much slower growth than the earlier in the year, which saw a 72% increase. In the period , Hulu was up 3.3% to $883 million, while Roku (The Roku Channel) grew 48% to $238 million, Pluto TV added 7% to $235 million and Tubi grew 14% to $143 million.

Total traditional TV advertising for the third quarter is expected to drop by 11%. This is in comparison to a year ago, which had the Olympics -- which contributed to a 33% spike.

“Traditional TV advertising has been relatively resilient to date... but we anticipate a recovery to 2% growth in the fourth quarter driven by the return of the NFL and political spending ahead of the midterm elections,” MoffettNathanson says.

In the second quarter, total traditional TV -- broadcast and cable networks, TV stations and local cable -- was estimated to be down 2% to $11.05 billion. TV stations were the best performers, largely due to growth in political advertising -- up 6% to $2.1 billion.

On the other end, broadcast networks sank 9% to $2.7 billion. Cable networks inched up 1% to $5.1 billion, with local cable adding 1% to $1.2 billion.