Our TV Business Numbers Are Better Than Yours: Volatility Index's New Meaning

Is the bloom off the FAST (Free Ad Supported Streaming Television) rose -- or whatever flower you choose?

Projections and estimates from media agency holding companies, stock market analysts, and other interested parties always have some revisions -- sometimes major ones. Just think of what life was like in the days just before, say March 10, 2020, and what came after.

An earlier IPG Mediabrands' Magna projection in March 2023 estimated revenues of advertising video-on-demand/connected television (AVOD/CTV) platforms of all types -- everything from Hulu, to Tubi and Pluto, to Netflix and Disney+ -- looking at a boffo 21% gain in ad revenues for this year.

Now, a new June 2023 estimate -- just three months later -- shows an expected and more modest rise of just 7.2%. This is driven by analysts' continued warnings of a coming recession for almost a year now -- with many believing it is still on the way.  



But let's do some Monday morning quarterbacking.

Starting around September 2022, Roku said advertising didn't look so good for its Roku Channel. In addition, more recently, Hulu -- the leading AVOD -- has been downgraded to a decline in ad revenues in the fourth quarter of 2023 and possibly the first quarter of 2024. 

Morgan Stanley media analyst Benjamin Swinburne estimated ad revenue in the second quarter of 2023 to be down 9% to $811 million, and off 5% to $753 million in the third quarter.

More realistic news is projected to come in 2024 where Magna now says a 14.3% gain is possible. In addition, next year many video platforms are looking for overall recoveries: National TV up 7.2%; short-form video 9.7% higher; and local TV, way up at 22%; for example.

With regard to the latter, in the past you might have seen the likes of total U.S. local TV stations ad revenue losing 12% to 15% or so in advertising revenues in a non-election, non-Olympics year, only to get the same percentage back the following year when the big electron year and Summer or Winter Olympics show up.

Now? Magna says local TV will lose ground to an eye-opening 22.4% in 2023 only to gain back the exact amount next year.

Perhaps we should more often focus on measuring the entropy of it all -- the volatility index.

Wild swings in sentiment, no doubt, make life harder for media planners and buyers -- with worse-case and best-case spread-sheet campaigns projections efforts all over the place.

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