Joseph O'Halloran | 09-09-2013
With alternative forms of media are currently vying for audiences and advertiser leading to a continual switch from TV, US broadcast revenues are set to decline in 2013 according to new research IBISWorld.
In its Television Broadcasting industry report, the analyst says that even though advertising revenue has started to rebound slightly, since increases in corporate profit have enabled many companies to invest in marketing efforts, new online channels have also started attracting an increasing share of corporate spending.
IBISWorld predicts that the broadcast TV industry will be buffeted by strong competition from the digital cable and satellite TV industries as well as new media with greater than ever numbers of viewers opting for the internet.
Even though successful firms will make adjustments to changing consumer preferences and deliver a more interactive and customised service, the analyst believes that over the last five years disposable income has decreased and consumers’ gradual shift to cable TV, online channels and other media has depressed advertising revenue. It calculates, total US advertising expenditure to have grown at an annualised rate of 0.1% during the past five years, which, nonetheless masks the period's dramatic declines in advertising expenditure, such as 2009's 17.5% decline. As a result, IBISWorld expects industry revenue to decline at an average annual rate of 1.1% during the five years to 2013 to reach $37.6 billion.
“The broadcast TV business model will continue to experience significant changes, and TV will become more interactive and customised for individual consumers during the five years to 2018,” explained IBISWorld Industry Analyst Olawale Harrison. “Relaxed ownership regulations will likely lead to further consolidation and additional layoffs because the broadcasting spectrum is limited and government regulations currently prohibit new stations from being developed…These factors combined with improving consumer sentiment are projected to stimulate average annual revenue growth.”