Tuesday, December 30, 2008

Broadcast Advertising Still Works

Despite the recession, people are still watching TV. And while cable and the internet has done much to fragment audience share, broadcast television still remains a dominate landing point for content. Ratings may have declined, but large numbers are still there and advertisers continue to spend to reach these viewers. "Mr. Magel of Initiative said, 'Broadcast television may be losing ratings, but there is no other medium that has been able to supplant it in a big enough way to negatively impact it at this point.'”

CBS has done the best job, with minimal loss of audience compared to the other networks. They have invested in scripted programming and are seeing audiences come to them. They will also benefit in the after market, as they can syndicate this programming on other networks and on the web. Not as easy to do when your entire prime time is devoted to reality shows.

In general, broadcast networks also have the advantage of their size to diversify, some doing better than others. Investments by the big four include cable ownership as well as web sites. Fox even believes in social networking, investing in My Space. As the broadcast networks recognize their diversified portfolios in the aggregate and begin to sell advertising solutions across these platforms, they will become even larger and financially better off. It will be this synergy that will take broadcast companies to the next level.

1 comment:

  1. Thanks, Andy -- for this, and for bringing our attention to the Sepinwall editorial a few days ago.

    It's going to be interesting to see how this plays out.