Local TV and radio station operators have some small reasons to cheer about in 2010. The business outlook is predicted to remain difficult but analysts expect gains of between 2 and 3% in these industries this year. Where will the gains be realized? Writing for Mediaweek, Katy Bachman compiled the following information.
While the Democrats may be obsessing about maintaining their Congressional majority, TV stations are ready to sell ad space to candidates of all parties. And there will be issue advertising as well as political action groups spend money in an attempt to sway public opinion. Some industry watchers expect 2010 political advertising to bring in $3.3 billion in TV advertising.
But station operators know political advertising is a short-term fix. In the long run, they’ll be looking to expand revenue streams. By the end of 2010, sources such as the Internet, mobile, digital sub-channels and retransmission will comprise up 13% of TV revenue. Paul Karpowicz, president of Meredith Broadcasting, says “[i]n an environment where ratings are scarce, if you can create a format that has sponsorship, product integration elements, that becomes attractive."
Analysts still expect radio to struggle. The good news is that many heavy radio advertisers such as “auto, telecom and consumer products, retail, finance/insurance, and fast food” are returning to the media format. Radio station operators are also looking to alternative revenue sources, especially online. But it may be several years before the industry could anticipate 10% of revenues coming from online. Bachman notes that advertisers perceive radio as lacking ‘buzz’. To counter the problem, some stations are turning to personalities to pump up ratings and excitement.
In any event, operators, for now, may have witnessed the end of the steepest declines in revenue.[Source: Bachman, Katy. AdweekMedia Forecast 2010, Adweek, 1.2.10]