Consumers are watching lots of TV during the pandemic and TV advertising revenue is rising.
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A mistake is often made by the Silicon Valley “insiders” when they lump all traditional media into one big (failing) bucket. Newspaper advertising in print has been decimated, but TV advertising has actually held up quite well, even during the pandemic. While we are all watching a lot of Netflix NFLX +0.3%, advertisers know that millions of consumers are watching traditional broadcast and cable TV every hour of every day.
According to a recent report from MoffettNathanson, the firm named in part for Michael Nathanson, a long-time, well-regarded media analyst, reported a 3% increase in U.S. TV advertising revenue in the third quarter of this year. The firm compared that to national advertising spending that fell 3.5 percent. For this final quarter of 2020, Nathanson envisions an increase of 2% in TV advertising revenue.
Analysts said that the increase in TV advertising in the third quarter of 2020 was unexpected.
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The report is titled “That Was Unexpected!” and Michael Nathanson spoke to why TV advertising revenue was remarkably up this past quarter, “First, the third quarter has a once-in-a-lifetime wave of every major sport returning to the market. Second, the intense 2020 election cycle attracted huge local, regional, and national ad spending – which we estimate to be up roughly 75 percent over 2016 – in key presidential swing states and in the fight for the Senate.”
Nathanson forecast strong future revenue for the TV industry, saying, “The TV ad market will post strong results in the coming three quarters as sports events, including the Olympics, return to their natural cadence.”
In contrast, the newspaper companies continue to lose advertising revenue, and in most cases, subscription revenue too. The national newspapers, particularly The Wall Street Journal and The New York Times NYT +0.9% have avoided this value-destruction by successfully driving paid-subscriptions online.
The Pew Research Center recently issued a report that documented, to no one’s surprise, that advertising revenue from the major local newspaper chains, already suffering from plummeting print advertising revenue, have been slammed even harder during the pandemic and the resultant economic recession.
Newspapers continue to experience deep drops in their advertising and subscription revenue.
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Pew reported, that among the six publicly owned newspaper chains — Gannett GCI.I 0.0%, New York Times, Tribune, McClatchy, Lee and Belo AHC 0.0% — who own and operate more than 300 daily newspapers, advertising revenue fell by 42% over year last year.