TV Broadcasting

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 850 television broadcasters in the US operate studios and facilities for the programming and transmission of TV programs to the public. Firms may also produce or transmit programming to affiliated television stations, which broadcast programs to the public. They generate revenue primarily through advertising sales, which include on-air and digital media.

Cyclical and Seasonal Sales

Advertising sales, which are the main source of revenue for television broadcasters, are seasonal and cyclical and driven by political campaigns and major events, such as the Super Bowl.

Competition from Alternative Media

Television broadcasters compete for advertising revenue with a variety of alternative media, including newspapers, magazines, outdoor ads, direct mail, multichannel video programming distributors (MVPD), over-the-top video distributors (OTTD), and online media (Google, Facebook).

Industry size & Structure

The average television broadcaster employs about 147 workers and generates about $74 million annually.

    • The television broadcasting industry consists of about 850 firms that employ about 126,200 workers and generate $63 billion annually.
    • The industry is highly concentrated; the top 20 companies account for about 86% of industry revenue.
    • Large firms include Sinclair Broadcast Group and Nexstar (Tribune Media Group). The major television broadcast networks (ABC, NBC, CBS, Fox, CW) also own and operate local television stations, primarily in major media markets. Major media companies, such as Gannett and Hearst, also own stations that operate as network affiliates.
    • About 1,760 television broadcast stations exist in the US, including almost 400 educational stations, according to the FCC.
                                Industry Forecast
                                TV Broadcasting Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                Apr 29, 2022 - Mid-term Election Ad Spending Under Way
                                • The Democratic Senatorial Campaign Committee has reserved $33 million to be used this fall ahead of the mid-term elections. The initial reservation of funds is likely to be added to and modified as the election season progresses. The announcement is the first of several expected for the 2022 mid-term elections. The National Republican Senatorial Committee (NRSC) is expected to announce its campaign ad reservations in May. Spending by both groups will be a fraction of what will be spent by Political Action Committees (PACs). Politico says that The Mitch McConnell-aligned Senate Leadership Fund placed $141 million in ads and the Chuck Schumer-aligned Senate Majority PAC reserved spots totaling $106 million.
                                • Total 2022 advertising spending across 16 media platforms serving local audiences will reach $173 billion in 2022, according to BIA Advisory Services. Over half (51%) will be spent in digital media, primarily Google and Facebook. Mobile ads on smartphones will get the largest portion at $36.7 billion. Over-the-top (OTT) advertising will reach $2 billion in spending targeting local viewers, making it one of the fastest growing local ad platforms. OTT ads, also known as streaming TV ads, are the advertisements delivered to viewers within video content. Local TV is expected get about $4 billion in political spending.
                                • Local and national television programming viewership increased as people spent more time at home and tuned in for entertainment and coronavirus news. Local advertising spending declined early in the pandemic, however, as many independent and small businesses cut back on nonessential expenses like advertising.
                                • US ad spending fully recovered in 2021 from the downturn in 2020, according to MediaPost analysis of Standard Media Index data. Full-year ad spending in 2021 increased 18% over 2020 levels and was up 9% compared to 2019. Much of the growth was driven by digital ad spending. Ad sales in more traditional media, including TV, were uneven throughout the year. In December 2021, some advertising verticals that have been hard-hit during the pandemic saw growth in year-over-year ad spending, including travel (+170%), wellness (+55%), and apparel & accessories (+25%).
                                • Ad dollars are expected to continue shifting away from traditional TV (linear/broadcast) to connected TV (CTV) services. Linear TV refers to a viewer watching a scheduled TV show when it’s broadcast on its original channel. CTV is delivered via internet streaming. Advertisers are shifting away from linear TV as CTV offers better data insights for ad campaign optimization and targeting. In survey results released in November by Advertising Perceptions, 56% of marketing and agency executives say they plan to increase ad spend for CTV over the next 12 months; 42% said they would keep their CTV budgets the same. More than one-third of marketing and agency executives say they will fund their CTV spends by shifting funds away from linear TV budgets. The pandemic accelerated the growth of streaming subscriptions as people spent more time at home.
                                • Local TV stations have kept viewers informed on coronavirus updates, closures, reopening details, vaccine availability, and local resources. Many TV stations quickly shifted most of their workforces to remote work, including on-air news anchors, reporters, and meteorologists. Most stations have returned to studios for news broadcasts with reconfigured sets that promote social distancing between on-air crew members. Many stations are also retrofitting office spaces to promote social distancing for returned personnel.
                                • Some households whose entertainment budgets have been cut because of the coronavirus pandemic are cancelling pay-TV in favor of streaming services. About 6 million pay-TV subscribers in North America cut the cord in 2020, according to Digital TV Research. The rate of cord-cutting is expected to slow in the coming years, however. Pay-TV services are expected to lose about 16 million North American subscribers between 2020 and 2026. Satellite will fare the worst with a loss of 7.5 million, followed by digital cable TV, which is expected to shed about 5 million. Internet protocol (IPTV) TV subscriptions will drop by about 3.4 million.
                                • TV ratings firm Nielsen was criticized by executives at traditional media companies who asserted that Nielsen undercounted TV viewership during the early months of the pandemic when most Americans were spending more time in their homes, according to The New York Times. Nielsen acknowledged some undercounting due to issues with device maintenance in some Nielsen homes during the pandemic. In June, Nielsen announced a new metric to measure streaming services’ overall share of TV viewership relative to traditional cable and broadcast TV. Nielsen debuted a new metric called The Gauge in May 2021 to measure streaming services’ overall share of TV viewership relative to traditional cable and broadcast TV.
                                • In August, the Corporation for Public Broadcasting (CPB) awarded $275,000 in emergency grants to 14 public radio and TV stations in areas of the US with low levels of vaccinations and/or high rates of infection. Grant recipients are using the funding to develop or extend programming about the pandemic and to counter misinformation about the vaccines. Some stations are also working with local resources to reach communities with low vaccination rates via public affairs programming and TikTok videos and text messages. Grantees included radio and TV stations in Alabama, Arkansas, Florida, Idaho, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee, Texas, West Virginia, and Wyoming.
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