The start of each calendar year brings forth numerous predictions about advertising and the media industry. Many of the reports are based on surveys by industry operators intent on making the future look good for their sector. So it’s always interesting to check out the opinion of an unbiased source. S&P Equity Research just released its outlook for the media and internet advertising industries and there’s good news in both places.
Here are a few top predictions for the media industry:
- News Corp may try to sell or other ‘cede control’ of MySpace which is rapidly losing ground to other, read Facebook, social entertainment sites.
- Large operators like Cablevision, Comcast and Time Warner Cable will roll out effective ways to grow and also measure interactive advertising.
- Sirius XM will effectively grow satellite radio when it releases its 2.0 version and will expand its market into the used-car segment. Historically, the service has relied on new car buyers for its new subscribers.
- The new Oprah Winfrey Network will do well and may capture impressive ad money.
- The live concert industry may rebound after a 10% revenue drop in 2010 pummeled profitability.
S&P analysts also see a bright future in the online universe for 2011. Scott Kessler, Information Technology analyst at S&P Equity Research is looking for a double-digit gain in U.S. online advertising. Part of this activity will be driven by Google. One of the firm’s major objectives this year will be to greatly expand its presence in the local advertising arena. This expansion will likely stem from acquisitions rather than organic growth.
Despite the online chatter and anticipation about social media companies and IPOs, S&P analysts believe this outcome won’t take place until 2012. Because Facebook, Twitter and LinkedIn are able to easily access capital for growth, there is no need for these companies to immediately file an S‑1 form to begin the going public process.
The data points addressed by S&P point to ongoing success for many Internet-based media companies. In addition, the improvement in entertainment options like live concerts also suggests a healthier advertising market overall in 2011 but media providers will need to manage disruptive trends like social media that aim to change the playing field.[Sources: S&P Equity Research Issues Media Predictions for 2011. Standardandpoors.com. 5 Jan. 2011. Web. 10 Jan. 2011; S&P Equity Research Issues Internet Predictions for 2011. Standardandpoors.com. 29 Dec. 2010. Web. 10 Jan. 2011]