Television advertising bounced back and showed growth in the third quarter, according to analyst Michael Nathanson of MoffettNathanson Research, who called the result a surprising development.
Nathanson calculates that after a record 28% drop in the second quarter, aggregated TV advertising increased by 3% in the third quarter, exceeding his forecasts.
“We expect growth to continue (at a 2% clip) in the fourth quarter as well, which is about 600 basis points better than initially expected,” Nathanson said.
The unexpectedly strong rebound was mainly the result of three factors, according to Nathanson.
The first factor was the wave of professional sports as COVID shifted NBA and NHL playoffs, as well as big PGA golf events from the second quarter into the third quarter. Those events attracted solid viewership as well as high prices on a cost-per-thousand viewers basis from advertisers.
The second factor was high ratings for news--particularly cable and record-setting political ad spending at local stations.
The third factor, according to Nathanson, was a return of brand spending, which boosted scatter prices even for non-sports and now new programming.
“We believe that the TV ad market will post strong results in the coming three quarters as sports events including the Olympics return to their natural cadence,” he said.
Nathanson figures that TV stations posted a 22.9% increase in ad revenue to $2.4 billion in the quarter. Cable networks were up 2.3% to $4.9 billion, cable MSOs rose 12.8% to $1.3 billion, offsetting a 13.2% drop at the Big 4 broadcast networks.
(Separately, Nathanson says that AVOD was up 24.8% to $896 million in the quarter).
Among the big media companies, AT&T’s unit formerly known as Turner posted a 22% increase in ad revenue to $949 million with TNT benefiting from the NBA playoffs and CNN cashing in on the elections.
Fox’s broadcast networks were down 33.4% to $325 million, but its cable networks were up 17.7% to $299 million.
Disney’s cable networks were up 14.4% as ESPN benefited from the return to sports. Sports also helped ABC which was down 3% to $467 million, the smallest decline among the broadcasters.
AMC Networks was down the most at 15.5%
The television industry's top news stories, analysis and blogs of the day.
Thank you for signing up to Broadcasting & Cable. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.