Equity analysts at investment bank Exane/BNP-Paribas, in a major 80-page report on the state of Europe’s commercial broadcasting industry, say that commercial TV is under extreme pressure from digital and social media operators. “The TV market is behaving abnormally,” says the bank.

The bank’s study is blunt: “We show that Facebook’s and Google’s expansion is likely at the expense of TV, as their video products are now a direct alternative to TV whilst print budgets are too small to feed their growth. Key FMCG (‘Fast Moving Consumer Goods’) categories are cutting ad budgets and accelerating their shift online. Note that the last time we saw such a decorrelation in 2007/08, ad growth slowed ahead of leading indicators.”

The study says that key advertising categories representing 40-50 per cent of the advertising market either are – or will be – trimming their TV budgets.

The bank has cut its revenue and profitability forecasts, with a weaker 2018-2019 (with a fall of around 1 per cent, compared to anticipated growth of 2-3 per cent). “This leads to broad, sometimes double-digit Earnings Per Share cuts for 2018-19. Structural drivers cited above are not going away and cyclical risk will likely rise in the next 1-2 years. We see a rising risk of TV ad growth flattening or even dipping into negative territory. We expect most broadcaster to cut their advertising outlook at H1 results.”

Exane downgraded its ratings advice on four out of the eight broadcasting groups it covers in detail (Pro7Sat.1, Mediaset Italy, Mediaset Spain and AtresMedia). The bank admits that its new forecasts are 4-6 per cent below the market’s consensus. “After three disappointing quarters, ad trends in Q2/2017 and more importantly H2/2017 are at risk in our view. We see a risk of further share price underperformance as we enter the late July / early August Q2 earnings season.”

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2. Thuraya-3 suffers major problem
3. AST SpaceMobile hit by Class Action
4. Optimism under threat at SES
5. Rivada visits Terran Orbital’s manufacturing HQ
6. Avanti wins spectrum debt obligation case
7. SpaceX breaks records for re-use launchers
8. IRIS2 already in trouble?
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