TV viewership is now decreasing faster than linear TV inventory prices are increasing, according to Magna’s latest forecast.
This shift is causing the TV networks’ revenues to slip.
Global linear TV ad spend was down 4% year over year to $289 billion in 2019, according to Magna. This year for the first time, TV represented less than half of total global ad sales at 48.5%.
In the United States, national TV ad sales were down 3% year over year to $42 billion, and are expected to continue declining by another 1% to 2% in 2020 as the economy slows. Even factoring incremental ad spend for the 2020 Olympics, which will total a predicted $750 million, national TV ad spend growth will be down by 1% in 2020, Magna said.
“Cyclical events in 2020 are not enough to fully stabilize national TV ad revenues,” said Vincent Letang, EVP of global market intelligence at Magna.
Linear ratings have been slipping for years, but networks have been able to stave off revenue declines by using scarcity to increase the price of their inventory. Marketers have paid that premium, since no other channel can drive reach as efficiently as linear TV.
But marketers are now getting priced out of the linear TV market – especially overseas.
“The ratings erosion is accelerating, the CPM inflation is accelerating, but the pricing is not growing quite as fast enough to offset the decline in ratings,” Letang said. “The demand is struggling to follow.”
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