The coronavirus has felt a “devastating impact” on the TV broadcasting industry with companies less willing to spend, claims a new report.
Almost every company in the world has had to take steps in order to limit the impact of the coronavirus on their business, leading to most tightening their purse strings. But while layoffs are the front of the news, marketing budgets are also being slashed – and TV ad sales are taking a severe downward turn.
According to Danyaal Rashid, thematic analyst at GlobalData: “COVID-19 has led to significant cuts in TV ad spending, affecting those broadcasters that rely on ad revenue to survive. Brands are reluctant to burn their limited cash reserves on ads, especially since this won’t stimulate demand in an economy shut down by non-market forces.”
The report from the research firm goes on to note that while broadcasters may be experiencing higher viewing numbers, their bottom lines will be hurt by falling ad revenues. This is reflected in GlobalData’s Thematic Rankings for the music, film and TV sector, with many broadcasters dropping down the chart.
It said that Comcast has fallen four places, from eleventh to 15th, while India’s Zee TV has fallen seven places, from ninth to 16th.
Rashid said: “While TV broadcasters are struggling, streaming services have been doing very well. This could be a turning point in the TV industry, with a significant pivot towards streaming. The revenue of subscription-based streaming platforms such as Netflix will remain unaffected by cuts in TV ad spending.”
Along with traditional broadcasters, digital platforms which rely on ad sales are also feeling the impact.
One example is YouTube, which despite seeing an increase in traffic, has also charted decline in ad sales as advertisers take a more conservative approach. One source cited by Bloomberg said that the ‘cost per mile’ (CPM, the cost an advertiser pays for one thousand views or clicks of an advertisement) for YouTube had fallen by 8% amid the pandemic.
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