Friday, May 9, 2008

Prediction: Broadcast TV Will Get Hosed In Upfront, But Not the Whole Story

The broadcast networks are feeling the heat of lower ratings, writers strike aftermath, and alternative entertainment options. But I wouldn't worry too much about their ability to make up the revenue from their diversification strategy. Disney had a terrific quarter, despite ABC, with gains in cable, theme parks, etc. Cablevision may have reported losses due to Madison Square garden, but so far revenues and profits are rising across all their other businesses, including their cable nets, business services, etc. NBC may feel the impact in their broadcast operations but are doing amazingly well with each of their cable networks.

Yes, viewers have moved away from broadcast television for a number of reasons; fragmentation exists with multiple channels reaching different demographic and psychographic interests. For cable programming, it has led to an increase in both viewing and in ad revenue. As each of these media companies diversify across multiple businesses, they each will maintain growth as viewership trends move from one platform to another. Maintaining a foothold in broadcast, cable, internet, gaming, etc., assures reaching the consumer wherever they go. Building synergies with each platform assures brand preference and value.