U.S. local TV station revenue to hit $27.7B in 2018: BIA/Kelsey

Financial market data. Image: Pixabay
BIA/Kelsey said that television is increasing its share of location-mobile advertising. (Pixabay)

Total revenues for the U.S. local television industry are expected to reach $27.7 billion this year, up from $26.2 billion in 2017, according to research firm BIA/Kelsey.

The local station ad revenue includes $18.2 billion from over-the-air, up 5.8% from 2017, and $1.1 billion for digital revenue, up 6.3% from last year. BIA/Kelsey said that retransmission consent agreements between local television stations and cable/satellite companies will contribute $8.44 billion to the total industry revenue this year.

“We anticipate political advertising will generate significant ad revenue for local television this year, in particular for over-the-air revenue,” said Mark Fratrik, senior vice president and chief economist at BIA Advisory Services, in a statement. “Of all media, television still dominates in political years, even as campaigns integrate more digital advertising into their overall strategy.”

BIA/Kelsey said that television is increasing its share of location-mobile advertising. The firm estimates that location-targeted mobile ad spend will be $22.1 billion in 2018, and that $3.1 billion of additional mobile advertising will be sold by traditional media players like television broadcasters.

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“Mobile advertising is a smart play for television because it offers a unique opportunity to leverage existing assets such as news and weather through sponsored mobile websites and applications,” said Fratrik. “These types of efforts are important as over-the-top—or OTT—services continue to attract viewers.”

BIA/Kelsey said that gross retransmission consent revenue passed $8 billion in 2017 and is expected to grow to $8.44 billion in 2018. The firm also said that this year, political advertising and digital business will be big revenue drivers for broadcasters.

“This year will be particularly interesting to watch in terms of political and digital. Local television is at a juncture where strategic decisions will be key to their success. To ensure we are delivering reliable data and insights, our forecast this year includes the largest number of revenue reporting stations we’ve ever had,” Fratrik said.