Advanced Television

Forecast: Linear ad market collapsing

March 19, 2024

MoffettNathanson predicts 2024 will be the year linear TV advertising model fails. “We had initial concerns about the early promises of a second-half 2023 recovery […] In all honesty, despite these concerns throughout the years, linear TV has ended up even worse than we expected,” writes Michael Nathanson.

Nathanson has lowered his forecasts and he now expects total US linear TV to be down 2.6 per cent to $27.5 billion (€25.3bn) in 2024, compared to his prior estimate of a 0.2 per cent decline, helped by Olympics spending. He sees broadcast ad revenue down 3.3 per cent and cable down 7.4 per cent.

But it is for 2025 that Nathanson’s forecast is alarming: a 12.4 per cent drop to $24.2 billion. He sees broadcast down 15.6 per cent in 2025 and cable off 9.1 per cent.

“It is now clear that outside of sports advertising, there should no longer be expectations of a recovery for linear TV advertising,” Nathanson said. “Of course, there will always be noise in the ecosystem, with the Hollywood strikes and macro weakness appropriately taking some blame. That said, the strength digital advertising enjoyed throughout 2023 — with surprising macro strength helping propel a return to double-digit growth — limits any hope that a stronger economy may deliver a shift in momentum.”

He adds that new streamer commercial tiers, will draw even more ad dollars away from linear TV. “These new entrants may also, however, pull dollars away from what has been, to date, among the largest beneficiaries of the outflow of dollars from linear: legacy AVoD services and FAST channels,” added Nathanson.

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