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Media Outlook to be Modest and Uneven in Rebound

17 Dec 2009

The Fitch Ratings Report on the outlook for the Media sector for 2010 believes the worst of the advertising downturn has passed, but the risk of a double-dip recession in the US remains present going into 2010. With political and Olympic ads tightening available ad inventory, the analysis expects ad pricing to stabilize (flat to plus/minus low single digits) in 2010 against prior-year comparable periods.

 

Some mediums will be left behind even in an ad recovery, says the report published in part in Research Brief:

 

  • Newspapers, yellow pages and consumer magazines are expected to be down due to permanent shifts in advertiser sentiment and excess ad inventory
  • Radio is likely to be flat to down slightly
  • Outdoor should begin a slow recovery later in the year
  • Broadcast TV will be an early beneficiary of increased ad demand
  • Cable nets and large market TV broadcast affiliates expected to participate in a potentially modest rebound

 

According to Fitch, the economic downturn has begun to reshape the competitive landscape in the US in favor of financially and operationally stronger entities. The report indicates that this will be a gradual, multi-year process as the current glut of ad inventory (particularly in local markets) will endure.

 

Audience fragmentation will persist throughout 2010, says the report, but the pace of legitimate new media entrants should slow. The report says the field of legitimate on-line platforms is possibly set in video and music, and does not expect new Internet radio platforms to emerge. The shift of viewers in video will occur to existing players, including the conglomerates' own sites. Recent efforts for cross-media measurements will stay at the forefront in 2010, while the pace of new cable networks will slow.

 

OPINION/FEEDBACK TO THE EDITOR



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