NEW YORK—In reflection of the seventh consecutive year of U.S. economic growth, Moody’s Investors Service forecasts a stable environment for the U.S. broadcast industry. Moody specifically points to potential revenue from political ads in the upcoming general election and the Olympics as reasons for the stability.
While core, non-political advertising revenue is only expected to grow 0-2 percent through mid-2017, according to Moody, it anticipates that political ad spending and the Summer Olympics will boost broadcasters’ overall ad revenue by 14-18 percent. With no incumbent candidate and no limit on campaign funding, Moody expects spending on political ads to reach at least $3.4 billion in 2016.
In addition, revenue for rated broadcasters is expected to grow by more than 15 percent through 2017 due to contractual step-ups or negotiations. However, with broadcasters’ reverse compensation payments increasing, net cash flow benefits are expected to be difficult to maintain.
New trends, including programmatic selling capabilities and the transition to ATSC 3.0, bode well for incremental revenue opportunities for broadcasters, per Moody.
To see the full report, titled “Broadcast Television – U.S.: Mature Core Ad Demand Returning in 2017 After Record-Breaking Political Spending,” is available here.