NEW YORK—The broadcast station sector will see very healthy 2022 results thanks to massive political spending and growth ad categories like legalized sports betting, according to “The Big Picture: 2022 TMT Industry Outlook” from Kagan, the media research unit of S&P Global Market Intelligence.
The report predicts that total TV and radio broadcasting station revenue will hit $40.05 billion in ad revenue in 2022, up 13.2% from $35.39 billion in 2021. TV stations expected to expand their revenue from $34.06 billion in 2021 to $38.22 billion in 2022.
For TV stations, 2022 will represent a 20% bounce in spot ad revenue, which will include $3.25 billion in political ads and increased ads for betting services, while digital revenue will grow by a more modest 5% and gross retransmission consent revenue will see a 3% increase.
Justin Nielsen, senior research analyst noted in the report that in addition to political spending, “legalized sports betting has already been a booming new ad category for broadcasters with station groups developing new programming outside the games on betting lines and best picks. Nexstar recently announced the launch of the SportsGrid Network, a diginet for sports wagering and fantasy sports, and Sinclair with their Bally’s partnership has a sports betting app and upcoming direct-to-consumer streaming service.”
“Other ad categories that are forecast to outperform in 2022 include healthcare, professional services, telecom, banking and home improvement with the auto, retail and travel categories still soft,” he added.
SVOD will also continue to see growth in 2022, the report predicted. Online video subscription revenue should hit $33.9 billion in 2022, up from $23.5 billion in 2020, and $17.5 billion in 2019, according to Deana Myers, research director and author of the section on SVOD.
Myers cautions however that “subscriber expansion could slow in 2022,” and that “high demand for exclusive and original programming has pumped up costs to a level that most streaming services will not be profitable for several years. Even Disney+, which has close to 40 million subs in the U.S., is not expecting to be profitable until fiscal year 2024. Recent sports rights deals struck with MLB, the NFL and the NHL could bring more live games to streaming services such as Prime Video, Paramount+ and Peacock, but spending billions on rights packages may pressure bottom lines.”
The report also predicted significant growth in the broadband sector, with subscribers growing from 116.56 million in 2019 to 131.01 million in 2022 and revenue from broadband services hitting $112.67 billion in 2022, up from $90.02 billion in 2019, thanks in part to Federal spending on expanding the availability of broadband service, according to Tony Lenoir, senior research analyst, who authored the chapter on broadband.
Globally, the news is mixed for multichannel video business. “Multichannel households are expected to continue growing globally in 2022, up 0.7% to reach a total of 1.11 billion, as subscriber gains in emerging markets make up for accelerated cord cutting in North America, Western Europe and advanced Asian markets,” explained Mohammed Hamza, principal analyst and Julija Jurkevic, senior research analyst in the section on multichannel TV. “However, a growing number of operators are choosing to shut down traditional services and migrate customers to own- or third-party virtual multichannel or other streaming services. Multichannel penetration of TV households is therefore expected to decline to 58.2% by end-2022 after peaking at 60.6% in 2018.”
Other findings include:
- After a pandemic pummeling, the box office is headed for a rebound in 2022 back above the $10 billion mark, though not without complications from shifting release windows.
- The pandemic-fueled shortage of global semiconductors that has broadly affected the consumer electronics, computing and telecommunications equipment segments is expected to endure through 2022, dampening smart phone and TV shipments.
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