The results from the major media conglomerates' third-quarter earnings reports are, for the most part, in. And the ad-sales metrics, while entirely distressing, aren't that surprising.
According to MoffettNathanson principal analyst Michael Nathanson, TV ad sales for the major media conglomerates receded 0.5 percent year-over-year, which is the worst performance since the Great Recession. (Nathanson's tally doesn't include data from Viacom, which reports Q3 earnings Thursday.)
According to the analyst, cable networks saw third-quarter ad revenue drop a total of 0.6 percent, to $5.1 billion, with Fox, Disney and Scripps bucking the trend and reporting 5 percent gains. Broadcasters, meanwhile, reported a 0.3 percent retraction for the period, to $3.1 billion. NBC was the only broadcaster to show growth.
"We think there are a few reasons leading to the weakness," Nathanson wrote. "First, we strongly believe measurement issues are leading to shockingly bad ratings, especially with cable networks targeting younger demos. The lack of ratings points are putting companies behind even before they start trying to sell advertising. Next, the third quarter (World Cup aside) historically lacks big live events for two or three months with football (NFL and college) plus MLB playoffs really only helping September results. In addition, it sounds like the quarter was hurt by TV budget weakness in several key TV categories like autos, retail and movies. Lastly, there is finally a growing acknowledgement that the shift to digital platforms is taking share out of TV budgets. In the end, it comes back to the fact that in a business of supply and demand, there still is not enough volume demand to drive any growth."
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