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Ad Market Recovery Likely To Help TV

March 20, 2010

We’re seeing first hand the pickup of ad spending for 2010. Our clients are starting to plan for the new year with rose colored glasses. A breath of fresh air after 2009, we’re looking forward to a successful 2010 for all of our advertisers! Below is an article we think is spot on about the advertising industry and it’s recovery. Cheers! -Thrive
Fitch Forecast: Future of Pay Walls, Web TV, Broadcast. By Nat Ives. Published: December 03, 2009

NEW YORK (AdAge.com) — Most people in the media business are excited to put 2009 behind them, but a stabilizing or even recovering ad market won’t help everyone equally, according to a new forecast by Fitch Ratings.

First national broadcast TV, and then cable networks and large-market broadcast TV are likely to participate in any recovery, but some media will fall short of even their depressed 2009 levels, Fitch said.

“Fitch expects print mediums, namely newspapers, yellow pages and consumer magazines, to be down again off very easy comparable periods due to permanent shifts in advertiser sentiment and excess ad inventory that will plague the industry for years to come,” it wrote in the forecast.

The New York Times Regional Media Group seemed to be anticipating continued difficulties when it announced yesterday that this year’s 2.5% pay cuts will remain in place next year. Ad revenue declines are expected to slow but continue, Chief Operating Officer Michael Golden in a memo to staff. Many magazine publishers, on the other hand, have said they expect to improve on their 2009 showings next year even if ad pages across the industry don’t reclaim their old heights.

Radio ad revenue next year will likely come in flat compared with 2009 or down slightly, Fitch said, while outdoor advertising should begin a “slow recovery” later in the year.

The forecast also predicted:

Media companies with print products will erect and then dismantle online pay walls next year. With exceptions like The Wall Street Journal, The New York Times, small local papers with limited competition and business-to-business magazines, Fitch said, most publishers face too much competition to get consumers to pay on the web. Some publishers have already decided not to focus on pay walls, despite a crescendo of attention to the idea this year, but many others remain committed to trying some form of pay scheme.

Audience fragmentation will continue but the pace of “legitimate” new media entrants will slow. “Fitch believes the field of legitimate online platforms is possibly set in video and music,” the forecast said. New cable network arrivals should slow as well.

Consumers aren’t likely to cancel cable subscriptions to watch shows entirely online. “While viewers want 100% on-demand optionality,” the forecast said, “Fitch continues to believe they also want a backbone of live TV channel lineups.”

The four major broadcast networks, including the NBC network that General Electric is selling to Comcast, will remain in 2010. But at least one could explore becoming a cable network as early as 2011, according to Fitch, which called NBC and ABC the most logical candidates.

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