Spots N Dots
The Daily News Of TV Sales
July11, 2017
PWC: SLOW GROWTH FOR TV THRU 2021
CABLE GROWTH WILL AMOST TRIPLE BROADCAST
TV ad spending is projected to grow slowly, from $71 billion this year to $75 billion in 2021, at which point it will represent a 38.8% share of the advertising market, according to the new Entertainment & Media Outlook from Price Waterhouse Coopers.
Overall, TV will grow at a compound annual growth rate (CAGR) of 1.3% from 2016 through 2021, a much lower 5-year forecast than issued last year (3.2%). This is due in part to declining TV viewing, a trend more exacerbated by youth and thus expected to continue if not pick up in the years to come.
The researchers note that: “Despite the range of OTT platforms and the trend for time-shifted viewing across a range of devices, linear TV remains the primary medium to consume video in the US. While this will continue to be the case for the foreseeable future, linear TV’s dominance is in decline.”
Even so, online is predicted to comprise a small portion of overall TV advertising revenues though the forecast period. Indeed, only $5.7 billion of the $75.2 billion in TV advertising revenues forecast for 2021 (or about 7.6%) are expected to be from online TV.
Within the broadcast advertising segment, cable networks are forecast to see a higher advertising CAGR (2.9%) than broadcast networks (1.0%), with the former extending its lead in ad dollars over the forecast period.
Meanwhile, with a strong 9.9% compound annual growth rate from 2016 through 2021, online advertising will be a $116 billion market by end of the forecast period, per the report. That would make it more than 50% larger than the TV advertising market at that point. PwC says that the online advertising market outpaced TV in 2016 by roughly $15 billion.
In other media, the radio ad market will increase marginally from $18.2 billion this year to $19.1 billion in 2021. Radio advertising is predicted to have a 2016-2021 CAGR of 1.2%, excluding satellite radio advertising, which represents just a fractional share of total radio advertising.
The hardest hit of the media types examined, newspaper advertising is the only market expected to see a decline in revenues between this year ($16.8 billion) and 2021 ($12.2 billion). The magazine advertising market is estimated at $16.6 billion this year, and will remain essentially flat through 2021 ($16.7 billion).
Out-of-home (OOH) advertising has the strongest prognosis of the traditional media types, though its healthy outlook is mostly the result of healthy projected growth in digital out-of-home advertising. Overall, OOH ad revenues are predicted to grow from $9.2 billion last year to $11 billion in 2021, with a 2016-2021 CAGR of 3.7%.
During the forecast period, digital OOH is expected to grow at a compound annual rate of 8.1%, bringing it from 39.4% share of total OOH ad revenues this year to 46.5% share in 2021.
This is the first year that PwC has included video game advertising in this overview.
This year, about $1.4 billion will be spent advertising in video games, per PwC, with that growing to $1.9 billion in 2021. That’s still just a small slice of the overall $28.5 billion video game market at the end of the forecast period.
And finally, cinema advertising is predicted to grow from $881 million this year to $965 million in 2021, with a 2016- 2021 CAGR of 2.4%.
ADVERTISER NEWS
The Wall Street Journal reports Deutsche Telekom, parent of T-Mobile, is reassessing its media operations worldwide and despite the ongoing price wars among the four major wireless carriers here, traditional TV spending is expected to decline slightly over the next few years. Print, radio, and out-of-home media are expected to decline “sharply”……Walmart is expanding the test of “pickup towers” into more stores. The units are described by Progressive Grocer as “huge automated kiosks holding hundreds of packages” that are usually placed by store entrances……Meanwhile, Walmart sibling Sam’s Club is testing a business delivery program in the Dallas market, with a next-day delivery option to the member’s place of business. Sam’s is also extending its drive-thru service to business members where orders can be placed directly into the customer’s vehicle……Lidl has only been in business in the U.S. for a couple of weeks, but already it’s being sued for trademark infringement by Kroger, which claims the new chain’s Preferred Selection private label is too close to Kroger’s Private Selection brand which Kroger had created more than 20 years ago……Campbell Soup is acquiring organic soupmakerPacific Foods for $700 million in cash. Supermarket News reports that’s the fifth time in five years Campbell’s has acquired a natural/ organic food company as it attempts to remake its portfolio of offerings in the midst of a growing health-and-wellness movement by consumers……Home Depot is acquiring Compact Power Equipment which will allow it to expand tool and equipment rentals to both professional and do-it-yourself customers…… Hilton is looking to establish a new hotel brand called Tru, focusing on millennials and offering lower price points than the company has concentrated on in the past. The chain will locate in less-expensive locations such as highway exits rather than downtown locations. It’s a large market: a data company that tracks the hotel business says about 30% of nightly demand for hotels is below an average of $83 per night……Furniture Today reports Bed Bath & Beyond is looking to get into the online furniture business, targeting Wayfair, Overstock and an expected effort to come from Amazon. “They do billions of dollars in the business, so why should we cede it to them?” CEO Steve Temares said at the company’s annual shareholder meeting. “We are just at the starting line,” he added. “It takes time but we’ll get there. And it’s going to be enormous”……After a successful test in a few markets, Dunkin’ Donuts is rolling out Dunkin’ Energy Punch nationally. Developed originally by some franchisees in New Hampshire, the drink combines a can of Monster Energy with raspberry or strawberry fruited flavors served over ice.
NETWORK NEWS
Laura Benanti, who played the role of Alura on The CW’s Supergirlsince the pilot, will not return to the series according to executive producer Andrew Kreisberg. Kreisberg said, “Unfortunately, Laura, who Greg and I have worked with for years going back to Eli Stone, was unable to continue in the role due to work commitments in New York.” He went on to announce that Erica Durance (Smallville) will take over for Benanti in the role. Durance is known for her portrayal of Lois Lane in the SmallvilleTV series and recently wrapped production on the fifth and final season of Saving Hope……John Cho (Harold & Kumar, Star Trek, Star Trek Beyond) will join the cast of the Fox series The Exorcist for the second season. Cho will play Andrew Kim, a former child psychologist who runs a group home for at-risk foster children on a secluded private island off the coast of Seattle. The second season of The Exorcist will return to Fox on Friday, September 29th at 9 PM (ET)……The daughter of Gotham star Donal Logue has returned home after being reported missing last week, according to a representative of the actor. The rep said in a statement, “Jade is now safely back home with her family. Donal is incredibly thankful for everyone’s support, and especially to the NYPD and FBI for her safe return. Logue plays Detective Harvey Bullock on the Fox primetime show……Former First Lady Michelle Obama will present the Arthur Ashe Courage Award posthumously to Ethel Kennedy Shriver at the 25th ESPYS Presented by Capital One. The award will be presented to Timothy Shriver, who is the chairman of Special Olympics and will accept the award on his mother’s behalf. Eunice Kennedy Shriver is being honored with the award for her dedication to using the power of sports to empower individuals with intellectual disabilities to become acknowledged and celebrated members of society. The award show airs Wednesday at 8 PM (ET) on ABC and will be hosted by former NFL quarterback Peyton Manning……Bounce has announced that Ed Gordon will host a star-studded special on the network featuring interviews with the biggest African-American celebrities in movies, television, and comedy. The special will feature interviews conducted by the award-winning journalist with Queen Latifah, Jada Pickett Smith, Michael Strahan, Omari Hardwick, D.L. Hughley and Cedric the Entertainer. Also, Bounce will premiere the third season of its highly-rated comedy In the Cut tonight with back-to-back episodes starting at 9 PM (ET).
STRONG BIDDING FOR WORLD CUP CLIPS
Bloomberg reports that both Facebook and Twitter are seeking to win online rights to video highlights from next year’s World Cup in Russia. FOX Sports holds the U.S. English rights to the soccer mega-event and it appears to be in the catbird seat for the bidding. Both Facebook and Twitter are said to be offering tens of millions of dollars for the highlight clips. FOX reportedly hasn’t decided whether to sell the online rights to a single partner or spread them around.
DONE DEALS
Adam Symson will assume the role of president and CEO of The E.W. Scripps Company as of August 8th, as current president/CEO Rich Boehne becomes chairman of the company. Symson was promoted to chief operating officer last November, overseeing day-to-day operations of the company’s broadcast TV, digital media and radio divisions. He joined Scripps in 2002 and held a variety of roles in the television and interactive divisions before being tapped to lead digital operations in 2011.
AUTOMOTIVE UPDATE
Toyota Motor North America, Inc. (TMNA) has opened its new North American headquarters in Plano, TX. Up to 4,000 people will be employed at the HQ facility. In addition to the employees who chose to relocate, Toyota previously announced that it would hire more than 1,000 new team members. Toyota has already filled more than 75% of its open positions……FCA announced pricing for the new 2018 Dodge Durango SRT, described as “the fastest SUV in its class.” Vehicles will start arriving in Dodge dealerships in the fourth quarter of 2017 with a U.S. Manufacturer’s Suggested Retail Price (MSRP) of $62,995 (excluding $1,095 destination charge……The Wall Street Journal says Tesla needs to raise about $3 billion over the next year to meet its planned capital spending. In the short term, the rollout of the new Model 3 is expected to draw down cash—but slowing production as the company faces increasing competition in luxury electric vehicles could hurt its stock price. Not that Wall Street isn’t already worried. Tesla’s stock plunged 13% on Friday.
BUSINESS BYTES
In a list that’s long but probably not complete, USA Today has compiled known store closings this year while wondering “Is 2017 the death of retail as we know it?” It counts J.C. Penney at 138 stores, about 14% of its locations, and Sears and Kmart, now up to more than 300 stores after beginning the year with plans to close half of that. Macy’s has announced closings of 68 stores, although the company still will have more than 700 Macy’s and Bloomingdale’s open. hhgregg, of course, has gone completely out of business shuttering the 220 stores that had been left after earlier closures. MC Sports went bankrupt earlier this year, closing 68 stores and while Gander Mountain has been bought by Camping World and that situation is still in flux, it appears at least 100 stores will not survive. Payless ShoeSourcewill add about 800 vacant stores to landlords’ inventory, and then there’s RadioShack (over 1000), along with Rue21 (about 400), Gymboree (375-400), Bebe(all stores), Limited (about 250) and Wet Seal at the beginning of the year in January, about 170 locations. Likely several regional chains of retailers (and also some supermarkets) will add dozens if not hundreds to the total.
We now have May data in from American Banker’s Index of Banking Activity, and it continues in “moderate growth mode” although the month was the second straight showing a decline in momentum. AB reports some areas of support remained robust including consumer loan activity that accelerated during the month. Real estate activity was also a bright spot, although the tightness in inventory of homes for sale may lead to reduced mortgage lending soon. Another positive was new account generation from consumer and commercial checking accounts. All four regions were comfortably above the 50.0 index level that delineates expansion from contraction, but the Western region was best at a 59.3 index. The Northeast was close at 59.1, while the South was at 56.3 and the Midwest at 54.7.
THIS AND THAT
Amazon was not the only company that had been looking to buy Whole Foods Market; reports say that supermarket competitor Albertson’s was one of the interested parties along with four private-equity firms. A person who was familiar with the negotiations told The Wall Street Journal, “Albertson’s couldn’t get there from a price perspective” and Whole Foods did not wish to pursue dealing with the private equity companies because of concerns they could generate leaks about the negotiations and likely offer lower bids than Amazon.
Despite all the stores closings we’ve been reporting on, employment in the retail sector rebounded in June, with a total of 8,100 jobs added as part of the 222,000 overall national gain. The sectors that created the highest amounts of new jobs were Education/Health Services, 45,000; Leisure and Hospitality, 36,000; Professional/ Business Services, 35,000; Government, 35,000; Financial activities, 17,000; and Construction, 16,000.
HOME PURCHASE INDEX AT RECORD HIGH
Although we’ve reported on a continuing shortage of available housing inventory, demand is extremely strong. The Fannie Mae Home Purchase Sentiment Index (HPSI) increased 2.1 percentage points in June to 88.3, matching the all-time high from February of this year.
Four of the six index components were up. The net share who reported that now is a good time to sell a home reached a new record high, increasing an additional seven percentage points to 39%, outpacing the net three percentage point increase to 30% of Americans who reported that now is a good time to buy a home. As a result, Fannie Mae’s analysis said the net share who say it’s a good time to sell compared to those saying it’s a good time to buy widened once again this month, which continues to indicate a potential seller’s market.
Americans also expressed greater belief that mortgage rates will go down over the next 12 months, Finally, the net share of consumers who think home prices will go up increased by six percentage points to 46%.
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SPOTS N DOTS
The Daily News Of TV Sales
July11, 2017
Phone: 888-884-2630