by Wayne Friedman , Staff Writer
Source: www.mediapost.com, December 2021
The revenue truth has been around for TV stations for some time — they cannot live and grow only from dependence on advertising (political and core) and affiliate revenues in the coming years.
NextGen TV to the rescue, according to one TV consultant forecast from BIA Advisory Services.
How about an extra $5 billion in five years — or maybe $10.7 billion worth of help by 2030?
That is what BIA projects. Much of this could be tacked on to (or could replace) some of that slow-moving $20 billion ad revenue that TV stations have seen annually over the past few years.
All this comes from new TV station technology — so-called NextGen TV — the new ATSC 3.0 standard being slowly rolled out.
NextGen TV promises digital media-like revenue from platforms potentially pulling in higher ad revenue, additional subscription fees from services, and perhaps the sale of data to digital-associated businesses.
NextGen base revenue is projected to be 22% of all local TV station revenue by 2030– advertising and affiliate revenue. This would help boost the relatively stagnant revenue core outlook — partly due to competitive, fast-growing, digital-first local media.
For example, BIA estimates that local TV advertising will only see very slight increases in coming years — from $19.3 billion in 2022 to $20.10 billion in 2030. Retransmission revenue should be faring a bit better — to $14.6 billion in 2022 and $17.4 billion in 2030.
Still, the track record for new non-over-the-air businesses for TV stations is not all that good. After more than a decade, traditional digital media efforts currently total around $1.5 billion or so per year — averaging about a 7% share of all stations’ advertising.
The future key here, according to BIA, is in selling “datacasting” services — data information coming through TV stations’ new technology standard, which can be sold to businesses such as automotive, education, telemedicine, and agriculture.
In the meantime, TV executives are still happy to see ever-rising, more record-setting political advertising revenues every other year — $3.5 billion in 2020, according to Kantar — which has complemented TV stations’ steady retransmission revenue from traditional, virtual, and streaming-focused distribution platforms.
Cheerleaders for local TV say ATSC 3.0 is now available in 40 markets, with near-term expectations that it could add another 20 markets, claiming around 70% of U.S. local TV stations’ viewers. But it’s still a long way to get to all 200-plus U.S. markets.
What’s the new overall selling proposition for local TV then? That local TV viewers, and their consumer actions and engagement with brands and business, will bring lots of connective media tissue to the overall local market economy.
That’s some big TV truth to process.
