If there were any doubts that streaming TV has finally hit its stride in 2024, NBC was ready to knock them down this month.

Although the network didn’t break out the share of 2024 Olympics viewing split between its three platforms—Peacock streaming, broadcast TV (NBC, Telemundo) and its cable channels (such as USA Network, E! and NBCSports)—the company’s enthusiasm about Peacock’s performance from Paris underscored the growing perceived value of streaming video in the media mix. NBC crowed that the 23.5 billion minutes of Paris Olympics coverage streamed via Peacock during the games, July 19-Aug. 11, was up “40% from all prior Summer and Winter Olympics combined.”

(Read: Peacock Signed-Up 2.8M Subs During Olympics)

NBCUniversal Media Group Chairman Mark Lazarus said the streaming usage “marked a groundbreaking moment for Peacock, which delivered …cutting-edge innovation while shattering all-time Olympics streaming records.”

The Olympics streaming victory lap surfaced amidst a marathon of other developments that illustrate the hurdles and leaps that face the industry. Days after NBC’s declaration of streaming success, a Federal court in New York issued a preliminary injunction to stop Venu Sports, the joint venture streaming service from Disney, Fox and Warner Bros. Discovery, which had planned to launch in time for the NFL season.

‘Wait and See’
These developments emerged just after Nielsen’s latest “The Gauge” report, which calculated that 40.3% of TV viewing is now watched on streaming platforms, followed by cable (27.2.1%) and over-the-air broadcast (25.5%). The streaming share was up from 37.7% a year earlier in Nielsen’s analysis of how Americans watch TV across platforms.

Collectively, this summer’s avalanche of streaming exuberance (and stumbles) mirrors the ways that the buzzy business of video streaming is taking off in countless directions. At the same time, dozens of challenges are becoming apparent in this latest competitor to (or collaborator with?) broadcast TV. They encompass technology, economics, legal/regulatory issues and consumer preferences for ad-supported programming vs. paid content.

The emergence of Venu, the proposed $42.99/month bundle of streaming content has been a major source of enthusiasm. Its program package is intended to include ABC, Fox, ESPN, TNT, TBS programs and by extension a slew of major football, baseball, basketball and hockey league games. Analysts are waiting to see how it will fare against alternatives such as the Xfinity StreamSaver bundle that Comcast is assembling by bringing Peacock, Netflix and Apple TV+ into one $15 per month package.

Rick Ducey, managing director of BIA Advisory Services, who analyzes the migration of media platforms, characterizes the current situation as “a very complicated environment for everyone to navigate.” He cites “nearly 2,000 streaming services available to consumers configured, bundled and sold across various platforms, publishers, and content aggregators.”

Ducey observed that industry providers and consumers are evaluating the very different business models that are available.

Other analysts offer similar perceptions of the cloudy near-term outlook. “This environment makes it challenging for consumers to keep track of what they are spending, which causes a great deal of frustration,” says Adriana Waterston, executive vice president and insights and strategy lead at the Horowitz Research Division of M/A/R/C Research. “This is why churn has been such a big issue.” She points to data showing that “consumers navigate these costs by timing which services they pay for when.”

Waterston sees the decision-making process about streaming tied to viewers’ “increased expectation for content that reflects [their] identities and views on the world,” and said she expects an even “bigger impact” if and when Venu debuts as “sports fans get a sense of the breadth of content this service could offer.”

In her firm’s recent research, 42% of sports fans said they would subscribe [to Venu], and among those who were likely to sign up, 38% said they would likely make a change to the other services they get because of it.

NBC, in its post-Olympics victory lap, pointed to streaming video’s ability to give viewers what they want to see. Peacock’s “Gold Zone,” a compendium of whip-around coverage of each day’s Olympic highlights, consistently ranked among Peacock’s top five most-watched Olympics segments and nearly quadrupled its viewership during the two weeks in Paris, according to NBC’s analysis.

One in five Olympics viewers tuned into “Gold Zone” and more than a quarter of Olympics viewers on Peacock watched via “Multiview,” with half of their time spent on featured live events, and half watching the “quad box” view of multiple events.

Churn Concerns
Yet in the deluge of viewer research, an unsettling picture emerges. In Xperi’s latest TiVo Video Trends Report, 20% of consumers said they believed “they have too many services.” The study found that at the end of 2023, the average home used 11.1 services (down slightly from 11.5 a year earlier)—but that the number of free services increased while paid services declined year over year.

Parks Associates also identified a 30% decline in spending on streaming services since 2021. Current spending is about $64 per month compared to $90 monthly three years ago, according to Sarah Lee, a Parks research analyst. “Consumers are spending less, but rather than go without, many are using ad-based alternatives to save on costs,” Lee said. “A service needs to provide unique and ongoing value if it is to charge a premium.”

Separate research by LG Ads indicates that 80% of viewers watch Free Ad-supported Streaming TV (FAST) channels and 63% prefer this format to other on-demand formats.

And that leads to questions about what viewers want to see on streaming channels.

MoffettNathanson media analyst Michael Nathanson, in a mid-summer evaluation, examined a shift away from original content, which had established Netflix in its early years. Now, Nathanson said that Netflix, along with Paramount+ and Warner Bros. Discovery’s (WBD) Max, are showing streaming gains even “as they released less content.”

“The market has shifted to allow the company to drive an increasingly large share of its viewership with its competitors’ content,” Nathanson said. “This is reflected in acquired titles’ (and especially nonexclusive acquired titles) rapidly increasing share of the list of top streamed titles.” He pointed out that only two of the top 20 most-streamed shows on Netflix in Spring were originals.

Seth Skolnik, chief operating officer of Vivid Labs, draws on his experiences at Paramount, Technicolor and new media start-ups to conclude that the bubble has burst. “We already see a significant decline in new show production, smaller deals, and only with established showrunners and stars,” he said. Buckle your pants, we are all going on a diet.”

BIA’s Ducey is also trying to interpret how streaming customers’ viewing preferences will affect future production and distribution. “Content investment strategy has shifted towards more focused content offerings such as TV shows and films in genres like action, medical or police dramas, international series and films, live sports [and]… science fiction,” he said. “The total investment in content and number of titles produced may have reached a limit for now as streaming businesses rationalize” growth and profitability metrics.

“Cross-platform (linear TV plus streaming) campaign planning, activation, optimization and improved measurement and ROI using relevant Key Performance Indicators will provide a lot of lift to streaming’s role in the local media ecosystem,” he added.

Caution: Lawyers at Work
As the content and marketing landscape takes shape, streaming is already facing increased legal scrutiny. Congressional forces are urging the Justice Department and the Federal Communications Commission to probe the Venu alliance with an emphasis on a potential antitrust violation in pooling sports league contracts of the several networks.

In the current legal challenge to Venu, plaintiff streamer Fubo claims it is being forced to carry dozens of channels in order to get licensing rights to the sports events.

“The FCC hasn’t regulated streaming services to date, other than in very discrete areas such as closed captioning,” explains Ari Meltzer, a communications attorney at the Wiley Rein law firm in Washington. He points out that there are already disputes about whether the FCC has authority over streaming video­—an issue that is being bruited around quietly on Capitol Hill. For now, oversight comes under other legal umbrellas, such as antitrust, contracts, copyright, and unfair and deceptive trade practices, Meltzer adds.

“There are tradeoffs: while streaming services don’t have to comply with the same regulations as broadcast and cable/satellite, they also aren’t entitled to certain benefits, such as statutory copyrights,” he added. “Most streaming services seem content trading the need to obtain copyrights for less regulation.”

Last week’s ruling on Venu from the U.S. District Court, Southern District of New York, has changed the momentum. There is no indication about how long the court’s temporary restraining order will stay in effect. Fubo, a nine-year old streaming service that concentrates on live sports (including NFL, MLB, NBA, NHL, MLS and international football), filed the lawsuit in February, claiming that Venu would control up to 80% of live broadcast sports content.

Venu’s owners said they plan to appeal the Court ruling.

Fubu co-founder/CEO David Gandler welcomed the ruling, saying “We seek equal treatment from these media giants, and a level playing field in our industry.” He cited the network and league that “monopolize the market, stifle competition and cheat consumers from deserved choice.”

Determining the Venu legal status “introduces a bit of a wild card” to the landscape, Ducey added. “If Venu does move forward and survives these threats, it certainly could [prove] how to bring some collaborative innovation to the market by trying to offer a ‘best-in-class’ sports experience to streaming viewers.” But he acknowledged that the high-value sports licensing rights could “challenge the viability” of Venu.

“Something has to give. Consolidation may help share costs but then partners stand to lose some competitive differentiation with their other direct-to-consumer and distribution platform strategies,” Ducey added. “It’s not clear how this nets out at this point.”

Meanwhile, Advertisers are Standing By
Central to many streaming providers’ programming and pricing decisions is the flavor of streaming video that appeals to viewers.

Among the options:

• AVOD (Ad-Supported Video on Demand)
• FAST (Free Ad-Supported Streaming TV)
• SVOD with ad-supported discount tiers
• TVOD (Transactional VOD, i.e., one-time rentals of a movie or show from Prime Video)
• PVOD (Premium VOD, additional fee for access to exclusive content such as major event or early-access viewing)

Add to that acronym jumble the emerging options for commercial operations, such as:

• CSAI (client-side ad insertion): ads aimed direct to customers
• SSAI (server-side ad insertion): ads put into video streams

Advertisers are evaluating the comparative values of CSAI, which enables more individual personalization to viewers vs. SSAI, which are less prone to disruptions or latency issues.

In its latest survey of viewer acceptance of ad-supported streaming, Hub Entertainment Research found that “an increasing number of TV viewers are accepting advertising in streaming video and they are readily able to discern the differences in how various services deliver the ad experience.” Hub said that “two-thirds of TV viewers would prefer watching ads if it saves on subscription costs” and the level of total ad intolerance has dropped from 17% in 2021 to 12% in June 2024.

Along with the ad-structure decisions comes a confrontation with a question that many media veterans fear: “Are we reinventing cable TV?” For example, the SVOD vs. FAST deliberation revives memories of the 1970s and ’80s introductions of ad-supported cable networks along with HBO, Showtime and other extra-fee “paid” channels.

Adriana Waterston of M/A/R/C calls content consolidation (such as Venu) into à la carte packages “the beginning of the new cable TV/multichannel bundle,” adding “I believe that at least from a value standpoint, this is what consumers really need, even if it’s not what they think they want.”

We’ve Seen This Show Before
In his 2024 memoir “Hits, Flops, and Other Illusions,” TV and film producer/director/writer Ed Zwick mused about Hollywood’s shift toward the economics of streaming.

The celebrated creator (“thirtysomething,” “Glory,” “The Last Samurai,”), laments that, “storytelling in this new age of streaming platforms seems deliberately crafted to create a new kind of anxiety designed to induce gorging rather than fulfillment, conversation rather than catharsis, consumption instead of closure.”

“The thoughtful has given way to marketable, and the complex idea replaced by the 15-second TikTok,” Zwick contends as he dissects Hollywood’s current “pressure to hold to …commercial viability” and the preference for “pre-sold IP [intellectual property] [that] can be marketed in a single sentence.”

After expressing his frustrations, Zwick kvetches that the modern Hollywood approach is “to aim low and hit the target.”

CHANTILLY, Va.—While even numbered years are usually a boon for broadcasters’ bottom line—with boosts in local ad spending spurred by the Olympics and political campaigns—slow economic growth is expected to dampen down expectations of a large boost in ad spending in 2024.

That’s the conclusion of BIA’s newly released 2024 U.S. Local Advertising Forecast, in which the research firm’s Advisory Services arm estimates local ad revenues across all media in the U.S. will increase 8.6%, totaling $175.6 billion, primarily due to the political season. 

That increase over 2023 is slightly shadowed by concerns of an economic downturn and overall lower ad spending, BIA said. With the forecasted political revenues removed, BIA’s projection in 2024 is $164.6 billion in total local advertising, only a 2.2% increase in local advertising year-over-year.

“As expected, 2024 will be driven by political spending, and, even in markets that are not highly contested there will be a large amount of political advertising,” said Nicole Ovadia, VP Forecasting & Analysis, BIA Advisory Services. “Local political advertising will be fueled by the Presidential and Senate campaigns as well as issue-based advertising. When we look at the forecast without political, we expect only a slight increase in ad spending due to both global and local economic trends that may create more cautious spending.”

The split between traditional and digital advertising shows that digital has a slightly smaller share, 48%, of the overall advertising spend at $84.1 billion. Traditional media ad revenue is slated at 52% of the ad spend at $91.5 billion.

Commenting on the ad split, Ovadia said, “Digital isn’t growing as fast as it once was. Meta, Alphabet, and others lowered their advertising revenue expectations several times throughout 2023, which in turn has caused us to reflect these reductions in the digital ad spend we track across 96 business categories.”

Key takeaways from the 2024 U.S. Local Advertising forecast include:

Top five growth channels for 2024:

• CTV/OTT (+39.5%)
• TV OTA (+30.0%)
• TV Digital (+24.3%)
• Cable TV (+19.7 %)
• Out-of-Home (+9.4 %)

Top three fastest-growing categories year-over-year:

• Political (+2028.3%)
• Special Restaurants, Food & Beverage Stores (+17.2%)
• Realtors (+16.7%)​

Key local business verticals declining year-over-year:

• Veterinary Services (-15.8%)
• Online Gambling (-15.3%)
• Funeral Homes & Services (-14.4%)

“When you look at which media will grow from this year to 2024, local political advertising is the main driver, which is terrific for local sellers of these channels,” said Ovadia. “Beyond political, several other verticals will increase next year. One category to keep an eye on is Realtors looking to advertise to drum up demand. Declining verticals include those that experienced growth during the pandemic, like veterinary services, that have now waned. Also worth noting is that many states legalized online gambling this year so we expect this sector to reduce its local ad spending and move towards National/Network advertising going forward.”

CHANTILLY, Va.—BIA Advisory Services has issued new forecasts for the local broadcast TV industry in 2024 that predict the sector will generate $23.8 billion in advertising revenue, with $21.7 billion in over-the-air (OTA) revenue and $2.1 billion in digital television. 

The $23.8 billion estimate would be an 11% increase over 2023 for the television industry. 

Previewing the new forecast in an address at the TVB Forward Conference, Tom Buono, founder and chief executive officer of BIA, explained the drivers behind the forecast include heavy political advertising spending along with increased spending in key television verticals, including legal and auto. 

Buono also examined local televisions’ share of the complete advertising wallet.

“We all expect a large number for local television ad spending in 2024, but it’s not only political that the industry can look to for growth,” said Buono. “Our new Share of Wallet (SoW) Performance Benchmarking Analysis reveals legal and automobile advertising will be up next year, too, providing solid opportunities for the industry. Beyond spending, we can see from this analysis how well television is performing across business verticals as compared to other media and in relation to the many advertising spend opportunities within a local market. Looking at ad spend this way is key to helping television continue to play to its strengths and find ways to take share from other media and move against threats.”

For automobile advertising, BIA’s 2024 forecast shows that TV OTA is expected to increase to $192.6 million in 2024, which will be the largest year-to-year increase since 2019. Another strong vertical for television in BIA’s SoW Performance Benchmarking analysis is legal services. BIA estimates legal spending will total $8.6 billion in 2024. When looking at ad share across all traditional media, TV OTA will be the only channel to grow for legal advertising in 2024.

Buono also examined ad spend in the connected TV and over-the-top (CTV/OTT) category compared to OTA and digital. While smaller in dollars spent, CTV/OTT is the fastest growing platform in the past five years, with +30.4% CAGR (2020 to 2024). However, TV OTA has more than four times the ad spend, mainly driven by political, than the other two channels, he reported. 

“After a few challenging years related to the pandemic, followed by supply chain and economic issues, we are forecasting significant increases in 2024 for local TV advertising,” said Buono. “Continuous examination and foresight will be key to maintaining a strong position.”

BIA also announced that to help television executives stay on top in a changing advertising marketplace, BIA is ready to perform a Share of Wallet (Sow): Performance Benchmarking Analysis that is customized to a broadcast group. More information is available at customservice@bia.com. 

CHANTILLY, Va.—BIA Advisory Services said today that it expects revenues across all media in the U.S. will reach $165.7 billion in 2023, a decline of 0.5% from the firm’s final estimate of $166.5 billion for 2022. Removing political advertising revenues from the estimate, BIA projects $165.2 billion in total local advertising next year, a 4.8% increase in local advertising year-over-year. The almost flat revenue projections for the year indicate continued economic and supply chain concerns, but BIA expects things to improve starting mid-2023. 

“This year has been filled with contrasting economic indicators creating several challenges for the local advertising marketplace,” said Nicole Ovadia, VP Forecasting & Analysis, BIA Advisory Services. “Supply chain issues continued to plague the first couple of quarters of 2022 making it difficult for local media sellers. In the summer, we had higher hopes for the remainder of the year; however, inflation issues and recession fears started to set in and that stalled anticipated rebounds in key verticals such as automotive.”

“For our 2023 forecast we lowered near-term expectations to reflect the current economic climate that we anticipate will stay with us into next year.”

The 2023 forecast shows digital continues to gain on traditional media, growing its share to 49% of the overall advertising spend at $81 billion, with traditional media ad revenue taking up 51% of the ad spend at $84 billion. BIA has been slightly decreasing its digital estimates over the last couple of forecasting rounds because of opt-in privacy measures on Apple and Android devices that have slightly impacted mobile advertising growth. 

The top three paid media channels for 2023 include direct mail ($37.2B), mobile ($33.5B), and PC/Laptop ($29.0B). BIA says direct mail’s growth has been slowing substantially and is expected to continue that pattern at +1.5% in 2023 due to rising costs and the continued growth across all digital channels. TV Digital, Over-the-Top (OTT), and Mobile will rise +17.3%, +12.3%, and +8.1% respectively, with TV digital growing from a smaller base than the other media. 

The business verticals that are expected to grow, according to BIA’s 2023 U.S. Local Advertising Forecast are: education (9.7%), retail (8.7%) and, restaurants (7.5%). Notable declining verticals include political (-78%), leisure and recreation (-4.9%) and real estate (-1.0%). The automotive vertical is projected to grow 4.9 percent, but not until the latter part of 2023.

“When it comes to advertising in the business vertical market, education offers a tremendous opportunity for local media in 2023, with companies offering opportunities for employees to improve their training and with people who are experiencing a job transition often enrolling in classes to advance their education,” said Ovadia. “For other verticals, too, I believe they will pop potentially faster if we see the Fed slow or stop raising interest rates, inflation tamed and a smaller than anticipated recession. Even with the economy in flux, the continuing strength of the labor market and corporate profits makes me feel confident that key verticals will show growth in the year ahead.”

BIA is hosting a public webinar, Top Recession-Proof Verticals for 2023, on Wednesday, Nov. 30 at 2 pm to examine opportunities for local sellers. Registration is free and can be watched on-demand after its airing using the same link. Plus, BIA’s Tom Buono, CEO & Founder, and Nicole Ovadia discuss top economic takeaways from the forecast on a Leading Local Insights Podcast. Listen here. 

For BIA clients, the company’s BIA ADVantage™ platform and MEDIA Access Pro™ database now contain the updated 2023 U.S. Local Advertising Forecast, which covers 16 media and 96 sub-verticals and includes comprehensive local television and local radio forecast updates and market profile data. To purchase access to BIA’s forecast data, email advantage@bia.com.

CHANTILLY, Va.—BIA Advisory Services has decreased its 2022 U.S. Local Advertising Forecast estimate to $167.4 billion, a decline from its original estimate of $173.3 billion issued in December 2021. 

But it is still predicting hefty growth for TV over-the-air (OTA) spending, which is set to see a +30.3% pop in 2022. and TV digital, which is set to grow 18.3%.  

Headwinds from overseas conflicts, continuing supply chain issues and deep cuts in ad spending from large verticals like automotive prompted them to revise their overall estimates for local TV advertising downwards, BIA said. 

Despite those problems, BIA also highlighted some positive trends for the ad market, including an anticipated strong political ad year, the expansion of online gambling local advertising and consumer spending on leisure and recreational activities. 

“The year didn’t start as strong as we had anticipated, making for a difficult first two quarters as some expected advertising spend started to retract,” said Mark Fratrik, senior vice president and chief economist, BIA Advisory Services. “On the one hand, personal income continues to rise, but the cost of consumer goods, rising gas prices and inflation are having a major impact and we believe that will influence how advertisers will choose to use their ad dollars in the coming months. All of that must be weighed against what we see as positives for local advertising this year.”

The latest forecast still gives traditional media ad revenue a slight advantage over digital at 52.5% of the ad spend ($87.9 billion), while digital media will get 47.5% of the ad spend at $79.5 billion, BIA reported. 

Overall, BIA is decreasing digital estimates slightly from the original 2022 forecast due to mobile facing headwinds amid new privacy measures on iPhones. Additionally, there has been slower than anticipated growth. Even as both digital channels continue to grow, it’s at a reduced pace than originally expected.

Other key data from the report includes: 

• The top three paid media channels for 2022 include Direct Mail ($34 billion), Mobile ($32 billion), and PC/Laptop ($30 billion).
• Over-the-top (OTT) is still slated to be the fastest-growing (57.4% in 2022).
• Significant growth is expected in TV OTA (+30.3%), TV Digital (+18.3%) and Radio Digital (+14.5%).
• Tier 1 - Automotive Manufacturers (OEMs) has been adjusted down by 17.6% to $3.9 billion (was $4.7 billion). Overall, for the entire automotive industry, BIA lowered the updated ad estimates by $1.4 billion for a total of $12.4 billion. That still indicates some growth from 2021, 5.5%, but significantly down from original estimates.
• Leisure areas like Airport, Cruises, and Other Travel; Fitness and Recreational Sports Centers; and Museums, Historical Sites, and other venues are all experiencing significant growth in ad spending from last year to this year. Pent-up demand for travel and entertainment are driving growth in these areas but may be tempered by late summer due to inflation and other economic concerns.
• Local political advertising spending was raised to $8.6 billion with local television getting a large share of the spend.

BIA’s vice president of forecasting and analysis, Nicole Ovadia, added that “We are seeing the economy play out in local advertising. For instance, people saved money during the pandemic and now, are enjoying different areas in the leisure and recreational verticals. People are spending on vacations and activities, and even going back to the gym. In all these areas, including political, we increased local advertising expectations. For businesses that have a direct reliance on supply chains, we have lowered expectations and will continue to monitor the situation throughout the summer fully expecting we may have to revise our estimates because the economy is in such a state of flux.”

CHANTILLY, Va.—BIA Advisory Services is predicting that the midterm election year will be a good one for local broadcasters, with political advertising boosting the local broadcast ad revenue to $21 billion in 2022. 

BIA is forecasting that $19.3 billion come from over-the-air (OTA) revenue and $1.7 billion in digital, a big jump of 26.5% for the industry. 

The new forecast will be released in an address by Tom Buono, founder and chief executive officer of BIA Advisory Services at the TVB Forward Conference on September 30. 

In the address Buono will argue that key drivers include a long and significant political advertising season, growth in TV’s digital advertising opportunities, and positive economic signs for key verticals.

“There are many factors that go into our forecasting,” said Buono. “We take into consideration economic trends, consumer behavior, growth in digital ad spending and the local advertising environment. These points have all shifted in an unorthodox way since the pandemic first hit and are now affecting television viewing habits and local advertising spending.”

Buono said that BIA’s analysts saw a V-shaped recovery in local advertising from 2019 to 2021 – with a $10 billion dip in 2020 and a close return in 2021 to pre-pandemic levels. 

Over the long-term, the BIA is expecting that local advertising in the U.S. to continue in a positive direction barring any new disruptions. BIA is now estimating a 3.4 percent compound annual growth range over this projected period.

The most significant factor going into 2022 for local broadcast TV, Buono explained, is that political advertising spending will be extremely strong for a significant portion of the year.

BIA expects political advertising next year to rival 2020 and even experience further expansion by 2024. 

The BIA’s combined forecasted local TV spend for political is $3.4 billion in 2022, with 44.8% of local media political advertising going to OTA broadcast TV alone. The top five markets for next year’s political advertising will be New York City, Los Angeles, Atlanta, Phoenix, and Philadelphia.

Growth in OTT is also significant. With many Americans’ continuing to work from home and shift their viewing habits, over-the-top (OTT) has become more of a focus for many broadcasters. 

According to BIA’s estimate, OTT ad spending is expected to reach $1.17 billion in 2021, $1.64 billion in 2022, and will surpass $2 billion by 2024.

“While the total local advertising trend in the U.S. is positive, it’s imperative to note that most of the growth is happening on the digital side, which includes mobile, online, and OTT ad channels. We expect local digital to exceed local traditional in 2023 (due in large part to continuing declines in print media advertising), making cross-platform selling even more important in the future,” said Buono.

Advertising in 2020 during the pandemic took its toll on many of the key verticals, BIA said. Leisure and recreation, auto and retail were hit especially hard. 

But many verticals have improved in 2021 from a lower base in 2020 and will continue to show improvement for next year. 

For TV OTA, key verticals increasing their spending ad dollars in 2022 will be education, legal services, health, leisure and recreation, and political, BIA predicts.

Possible target categories for the broadcast TV industry include supermarkets, wireless carriers, quick service restaurants (QSRs) and hospitals.

In early September, BIA released its 2022 U.S. Local Advertising Forecast for 16 media, including local broadcast television, and 96 business sub-verticals. The five-year forecast is available for all 210 local television markets and is based on a proprietary forecasting methodology of the local advertising marketplace. Forecast data is delivered by the local advertising intelligence dashboard, BIA ADVantage. 

More information is available here.

CHANTILLY, Va.—The pandemic hammered core local TV revenues in 2020, but record political advertising and burgeoning digital operations helped the industry pull in $19.7 billion, according to BIA Advisory Services’ “2021 Investing In Television Market Report.”

Political advertising ($4.4 billion) and digital revenues ($1.4 billion) masked what was a disastrous year for core advertising revenues, which fell by 23.1%. Thanks to political and digital, industry revenues actually grew to $19.7 billion in 2020 compared to $18.3 billion in 2019.

BIA is predicting a slight rebound this year, with core over-the-air (OTA) advertising increasing by 5.4% to $14.9 billion for 2021. 

In 2022 total local OTA revenues are forecasted at $17.8 billion.

“This past year demonstrated that local television stations are doing the right thing by continuing to strengthen their digital and multimedia sales efforts,” said Mark Fratrik, senior VP and chief economist at BIA Advisory Services. “They also need to continue to develop strategies that incorporate over-the-top (OTT) sales to reach specific audiences, while simultaneously reaching the broader local viewers. OTT increasingly is becoming a competitive and complementary advertising platform for local television station operators.”

In addition to the standard big television advertisers like automotive and general services verticals, growth in core advertising this year will come from business verticals that are hyper-focused on market needs and new entrants like online gambling, according to Fratrik. 

Promising sectors, including spending by consumer lending and mortgages, which BIA predicts will be up 45% in 2021. 

BIA also predicts a growth in clothing store advertising (projected to grow by 45% in 2021), auto and direct property insurance sector (up 33%), direct health and medical Insurance (up 29%) and online gambling. 

BIA is continuing to follow the status of the Summer Olympics in Japan. Fratrik noted that said if they do commence, estimates for television will increase and BIA will report on them.

CHANTILLY, Va.—Advertisers are following viewers’ eyeballs and spending more on OTT spots, with substantial growth expected over the next few years, according to BIA Advisory Services, which projects that OTT local ad spending will jump from about $1.18 billion to $2.37 billion by 2025.

These projections were discussed during BIA’s webinar, “All Eyes on OTT—Breakout Media Category in 2021.” In addition to OTT advertising estimates—which include Connected TV numbers—the webinar featured a panel discussion with industry experts sharing important trends and challenges surrounding OTT advertising.

BIA specializes in local advertising, so its projections of OTT ad spending refers to local. For 2020, the total ad spending number for OTT came in at $990 million; BIA expects that number to cross the $1 billion mark in 2021 with a total of $1.176 billion. Increased growth is expected over the next few years, culminating in the $2.373 billion projected OTT ad spending in 2025. All told, the Compound Annual Growth Rate during this period would be 19.1%.

It’s not just the total that is increasing, OTT’s share of the total ad spending is slated to increase over the same time period. Linear TV is still the largest sector for ad spending, but its lead is dwindling due to the rise in OTT ad spending, as well as increases in online and mobile.

The webinar also featured a presentation from Justin Fromm, executive vice president, Business Intelligence, for Advertisers Perceptions for BIA, who detailed results from an annual survey showing that video is still considered the most important media type by a healthy margin of advertisers (49%) to meet their goals and that OTT is becoming a popular new resource for them.

Forty-one percent of respondents said that they increased their ad spending for streaming services (CTV/OTT) over the last year, the largest increase of any other digital video tactic. It was a 42% increase for TV Tactic ad spend; linear came in at a 26% increase, but also saw the largest decrease in spending at 14%.

In terms of frequency of buying addressable advertising, streaming was the third highest outlet for doing so “all or most of the time,” behind social media and DSPs. Linear, meanwhile, was the least likely to do this all or most of the time, and the most likely to do it less than half the time or never.

Still, linear TV is considered a top-five video advertising tactic by the highest percentage of advertisers (65%), but streaming is closing in on it, with 57% ranking it among their top five resources.

The presentation also touched upon important factors to consider when it comes to selecting an OTT advertising partner. More than half (55%) of respondents said that audience reach was most important, with quality of programming (43%) and quality of advertising opportunities (38%) rounding out the top three. Reach was also a top factor for CTV ads (50%), just behind targeting capabilities (53%) as the most important.

There is still a need for advertisers to understand what they are getting with OTT or CTV advertising. When given a statement saying that adding OTT to a linear buy is just buying impressions without knowing the reach, frequency or effectiveness of the campaign, 58% of advertisers agreed.

The survey also showed that ad fraud was the top cited concern from advertisers, with ad fraud in digital video leading the way at 36% and ad fraud in OTT at 29%. However, despite recent examples of CTV ad fraud cases, many of the panelists agreed that the perception is greater than the actual risk.

The BIA “All Eyes on OTT” webinar is now available to watch in full on YouTube. 

CHANTILLY, Va.—BIA Advisory Services has released its forecast for U.S. local advertising in 2021, which among a growth as the industry rebounds from COVID-19 includes the emergence of OTT and Connected TV as key players in the broadcast industry’s advertising outlook.

“The OTT TV and Connected TV segment are game changers for the broadcast industry because it is now very easy to purchase fragmented inventory and do audience targeting,” said Rick Ducey, BIA managing director. “These improvements will help sellers better justify local OTT buying, and we expect local audience share gained in Q2 and Q3 of 2020 will be maintained and expanded going forward, presenting a tremendous opportunity for the industry.”

BIA reported that OTT local advertising generated $1 billion in revenue in 2020. With targeted advertising capabilities with quality video programming, BIA projects that OTT local advertising will grow to $1.2 billion in 2021.

Traditional broadcast advertising among local TV and local radio stations will still be the biggest draws for the broadcast industry, however. Local TV is estimated to bring in $15.7 billion in 2021, while local radio is estimated to net $12.6 billion.

That will put both local TV and local radio in the top five of revenue sources in BIA’s projections. The top three is rounded out by online, with an estimated $23.3 billion; mobile at $23.4 billion; and direct mail at $31.2 billion. In total, traditional media revenue will account for 55.3% of local advertising with $76.1 billion, which is actually a slight decline.

Digital media revenue will make up for that dip, according to BIA projections, earning $61.5 billion in 2021. It’s share of 44.7% of the market is an increase of 3.7% from 2020.

Overall, BIA projects that U.S. local advertising revenue across the media will hit $137.5 billion in 2021, up 2.5% from 2020, with the availability of a COVID-19 vaccine a big factor. However, BIA does not expect pre-COVID levels to return until 2022.

CHANTILLY, Va.—As local news continues to try and compete against digital competitors, a new study provides support to the claim that allowing stations in a market to merge will increase their local news output.

Gray Television backed the BIA Advisory Services study that reviewed the number of hours of local news provided by Gray TV in 93 of its local TV markets in 2014 and 2020, comparing markets where Gray acquired another TV station to ones where it did not.

This study is based around the suggestion that many TV broadcasters have made in recent years for the FCC to eliminate or relax longstanding federal regulations that prohibit common ownership of more than one TV station in a local market, which broadcasters believe could promote greater local news production.

BIA found that in markets where Gray TV acquired a second TV station or an additional major network affiliation, Gray increased its weekly local news production far greater than in markets without any in-market consolidation.

Per BIA’s findings, in markets with a consolidation event, the average increase of weekly local news production was 7.5 hours, with the average weekly news output increasing 27.8%. In markets without consolidation, local news increased at 6.2 hours per week, an average increase of 17.5%.

Consolidation events had significant impact in mid-sized markets (DMAs 51-100) and small markets (101-120). In these markets with consolidation, local news output increased by 7.4 hours per week (27.9%); mid-size or small markets without a consolidation increased 5.2 hours per week (18.2%). This growth was even larger in markets ranked 151-210, where those with consolidation saw a weekly increase of 10.1 hours (37%), compared to 3.8 hours in these markets without a consolidation event.

Large markets saw significant gains in local news output regardless of a consolidation (12.8 additional hours per week).

According to the BIA study, in seven of Gray’s mid-sized and small markets, Gray has consolidated English-language and Spanish-language stations. In four of those markets, Gray shares the resources and equipment from its English-language station to provide news in Spanish for its Spanish-language station.

“Gray’s experience in 93 of the 210 television markets demonstrates that relaxation of the FCC’s ownership rules—especially in mid-size and small markets—is likely to lead to more efficient television combinations that will increase the hours of local news available to consumers and provide more of the positive social benefits associated with local television news,” BIA concluded.

The full BIA report is available online.

CHANTILLY, Va.—As the impact of the COVID-19 pandemic rolls on in the U.S., BIA Advisory Services has updated its 2020 local advertising revenue forecast from April to today, where it is estimating $140.4 billion for the total local advertising market.

The April readjustment from BIA dropped the company’s initial projection of $161.3 billion for 2020 to $144.3 billion. Now with this latest drop to $140.4 billion, 2020 would experience a 6.1% decline from 2019’s numbers, even with the upcoming presidential election.

Revenue from political ads are one of the few positives for the local ad markets. Since April, BIA has increased the expected political ad spend from $7.1 billion to $7.3 billion. Of that new spending, $138 million is estimated to be going to TV OTA, $40 million to cable, $26 million to online/digital and $5 million to radio OTA.

Other advertising verticals showing some resilience during these times are healthcare and finance & insurance. While both are down in overall ad revenue spend, there is steady and in some cases even increasing ad spend.

For overall media ad spend, all media except for OTT are experiencing a decline in ad revenue.

“Right now, we believe a realistic view of the economy overall and the advertising marketplace is that after a dramatic decrease in the second-quarter and a bumpy start to the third, the remainder of the year will turn positive but end up with an overall decline in local advertising for the year,” said Mark Fratrik, senior vice president and chief economist at BIA.

BIA is set to join SalesFuel to present local advertising data and analysis during the “Accelerating 4th Quarter Revenue: Planning for 2021” webinar on Aug. 18 at 11 a.m. ET.

For more information, visit www.bia.com.  

CHANTILLY, Va.—The advertising revenue forecast for local TV stations does not look as sunny as it did at the start of 2020 from BIA’s point of view, but even while there has been a negative impact because of the coronavirus pandemic, the prospect of an election still puts 2020 slightly ahead of 2019.

After initially projecting U.S. local TV ad revenue to reach $19.4 billion earlier in the year, BIA now estimates that will come down to $18.5 billion ($17 million over-the-air revenue, $1.5 million digital revenue). This is according to BIA’s Investing in Television Q1 Market Report and MEDIA Access Pro.

“Local television stations, like all media, will see significant decreases in advertising from many business verticals like travel, leisure and retail,” said Mark Fratrik, senior vice president and chief economist at BIA Advisory Services. “Political advertising will buffer those decreases in many markets that have competitive Senatorial and Gubernatorial races and in Presidential battleground states. Plus, continued growth in OTT and digital will help to soften the impact of the pandemic on advertising revenue.”

PLUS: Two-Thirds of Ad Buyers Significantly Impacted by COVID-19

BIA estimates that $7.1 billion will be spent on local political ads through Q4 2020, with over-the-air netting 45.8% of political ad spend. The growth of political advertising spend in OTT will also benefit local TV owners, according to BIA.

In addition, $10.44 billion of the BIA forecast represents retransmission consent agreements between local TV stations and cable/satellite companies/virtual MVPDs for 2020. BIA expects retransmission fees to continue to rise, based primarily on rate increases in each market.

PLUS: Pandemic Brings TV to the Forefront

“It is going to be a dynamic marketplace this year, and we will continually monitor the nationwide and local economies to update our forecast based on new information,” said Fratrik.

BIA has also announced that Local TV Market Profiles and Stations Overviews are now available through the BIA ADVantage platform.

For more information, visit www.bia.com.

CHANTILLY, Va.—The local advertising market looks different than it did at the start of 2020 because of the coronavirus, and BIA Advisory Services is readjusting its revenue projections as a result. After initially estimating a total revenue of $161.3 billion back in November 2019, BIA now projects the 2020 numbers to be $144.3 billion, a drop of 10.6%.

Local television, and local radio, have been heavily impacted by decreased ad spending by leisure & entertainment, restaurants, retail companies and sports cancellations. For local over-the-air TV, BIA decreased its estimated revenue for the year by $800 million ($17.8 billion to $17 billion); it projected the same loss for cable ($6.4 billion down to $5.6 billion). For online platforms, including TV online advertising and OTT advertising, the drop is estimated to be less significant, but still $100 million less each.

“A realistic view of the virus is that it will continue to have a negative impact on the second quarter, with some continuation into the third quarter,” said Mark Fratrik, senior vice president and chief economist, BIA. “We have assumed that there will be a strong rebound in the latter part of the year, but we will have to re-evaluate as the on-going economic impact becomes clearer.”

That rebound could come in the form of political advertising as the U.S. general election will take place in early November. These political ads are expected to soften the revenue decrease for local cable and local OTA TV stations compared to other media.

Related, many organizations, like NAB, and members of Congress have been pushing for federal advertising dollars to go to local media stations to help them continue to operate amid this loss in traditional advertising revenue.

As far as how to best move forward among the current uncertainty, BIA CEO and founder Thomas Buono says that media groups can focus on three key areas: preserving liquidity, emphasize and manage relationships and think forward as a team.

BIA is offering detailed local ad market revenue forecasts for 210 TV markets, along with a COVID resource area, through its BIA ADVantage platform.

For more information, visit www.bia.com.  

CHANTILLY, Va.—The 2020 presidential election will help U.S. local advertising revenue reach new heights, a projected $161.3 billion to be exact, according to a recent report from BIA Advisory Services.

BIA’s “U.S. Local Advertising Forecast 2020” forecast would be a 5.8% growth rate from the $152.5 billion in ad revenue from 2019, with political ad spending helping to boost revenue. Where this revenue comes from is also seeing significant change, as BIA sees increases in ad revenue from OTT and social media, though traditional media will remain the biggest resource.

Traditional media is expected to account for $94.4 billion of the ad revenue in 2020, up from $93.2 billion in 2019, which would make up 58.5% of the total revenue. Online/digital revenue will see a larger growth, however, earning an estimated $66.9 billion in 2020, or 41.5% of the total revenue; it earned $59.3 billion in 2019. OTT and social media are big drivers for this increase.

BIA forecasts that $1.06 billion in local activated advertising will be spent on OTT in 2020, and that number will grow to $2.13 billion by 2024. For social, $29.5 billion will be spent in 2020, growing to $44.6 billion by 2024. Social media ad revenue primarily comes from mobile devices, with them currently representing a 93.8% total and an expectation to hit 96% by 2024, as mobile native/social is the fastest growing segment of mobile advertising at 13.9%.

As far as the specifics of political ad spending, BIA projects that $6.58 billion will be spent for the 2020 elections. Over-the-air will account for nearly half ($3.07 billion or 47%), but online digital will bring in about 22% ($1.42 billion) and even OTT is getting in on the action, with an estimated $51 million (0.8%).

“The expectation of an aggressive presidential election next year, along with primaries and state-wide races, indicate that political ad spending will be a serious driver of local ad revenue next year,” said Mark Fratrik, chief economist and senior vice president at BIA. “Combine these factors with the ongoing growth of mobile and social advertising and the emergence and future significant advancement in over-the-top advertising, the revenue landscape for next year looks robust.”

The full “U.S. Local Advertising Forecast 2020” report is available on BIA’s website.

CHANTILLY, Va.—BIA Advisory Services has announced that it is adding local OTT advertising to its Local U.S. Ad Forecasts, and in its initial report highlighted that OTT revenue is and is projected to grow a strong clip over the next few years.

BIA defines OTT advertising as locally targeted advertising included on streaming video that is delivered to TV sets via internet connections. OTT ad forecasts from BIA focus on the local activation of OTT video impressions on connected TVs. BIA believes that OTT ad inventory can be both complementary and competitive for local linear TV ad budgets.

After generating $598 million in OTT revenue in 2018, BIA estimates that number is set to grow to $857 million in 2019 and eventually to $2.13 billion in 2024, which would represent a 148% growth from 2019.

“The industry has reached a stage where there are several existing and emerging OTT players that have a high growth potential,” said Mark Fratrik, chief economist and senior vice president at BIA Advisory Services. “By partnering with them, broadcasters can drive new revenue by delivering their valuable content and diverse audiences. I believe we’re at the tip of the opportunity and we’re working closely with OTT firms to analyze revenue opportunities.”

BIA will release its complete U.S. Local Advertising Forecast, covering 16 markets including OTT, in early October. The report is available for all 210 local TV markets and is based on a proprietary forecasting methodology of the local advertising marketplace.

CHANTILLY, VA.—Candidates for office next year will spend $6.55 billion on local political advertising with nearly half being spent on over-the-air television, according to a new estimate from BIA Advisory Service.

BIA is forecasting political spending on OTA TV advertising will reach $3.08 billion, or 47% of the total, followed by online/digital outlets at $1.37 billion (21%), multichannel video programming distributors (MVPDs) at $919 million (14%) and radio at $312 million (4.8%). The rest will go to other media outlets, including direct mail, which normally is a major political advertising medium but will only capture a small percentage in 2020, BIA said.

“Campaigns will continue to rely on television as a dominant platform for advertising while supplementing with digital advertising across mobile and desktop,” said Mark Fratrik, chief economist and SVP at BIA Advisory Services.

Los Angeles, Phoenix and Philadelphia are expected to top media markets in terms of political ad spending next year. In Los Angeles, candidates will spend $168 million on TV, $76 million on digital, $55 million on cable TV and $17 million on radio, according to BIA.

TV spending in Phoenix and Philadelphia will be high with the former seeing $156 million in spending and the latter experiencing a TV ad spend of $135 million, the company said.

“In some of the smaller markets, one thing to keep an eye on is how the huge volume of political advertising could crowd out other local advertisers during primary and general election seasons,” said Fratrik. “That may have an impact on advertisers and media companies, and we’ll certainly factor that into our forecasting as we go through the fall.”

The estimates of 2020 political advertising will be part of BIA ADVantage, an advertising intelligence report focusing on 94 markets.

More information is available on the BIA Advisory Services website.