BIA/Kelsey: Station Revenue Nearly $B in 06

Though facing challenges, the broadcast business is strong and growing, with television station revenue expected to reach nearly $31 billion in 2016, according to a new report.

Research company BIA/Kelsey says revenues will be up 14% from 2015, with advertising revenue increasing by $2.6 billion and retransmission consent increasing by $1.75 billion. Much of the increased advertising spending comes from political, with campaign spending expected to be in the $2.8 billion to $3 billion range, BIA/Kelsey says in its report, Television Broadcasting 2016: Current Assessment and Future Outlook.

BIA/Kelsey figures that the TV business is worth $84 billion and could be worth more than $100 billion in 2020, when industry revenue could reach $35 billion.

But achieving that growth won't be simple.

The TV industry is in a state of transformation. Technological change, both inside and outside the industry, will have a major impact over the next decade, BIA/Kelsey says.

A dramatic shift in advertising is affecting all traditional media. The internet is becoming the go-to source, particularly for millennials, for news and entertainment, with mobile devices providing a constant connection to the world around us. An important driver of this migration is the increased use of social media sites, the report says. Television is better positioned than other traditional media to deal with this shift in consumer habits and device usage. Mobile and social will continue to have a major impact on how advertising dollars are allocated.

Meanwhile, the industry will also be dealing with the new NextGen ATSC 3.0 standard, which BIA/Kelsey views as a game changer for the business.

This new standard will allow for improved picture quality and more content distribution, and it will open up new potential applications for television broadcasters, according to the report.

At the same time, cord cutting and skinny bundles will help increase TV groups' negotiation position and make retrans payments a bigger share as viewers gravitate to the channels they watch most.

BIA/Kelsey focused its report on 18 large TV groups, including four network O&O groups, six publicly traded station owners and eight large private broadcast companies. Those groups represent a big chunk of the business.

Its incredible that 18 groups that represent just over 50% of the number of commercial stations earn over 80% of the revenue for the entire industry, said Tom Buono, CEO of BIA/Kelsey. These 18 groups, competing against each other in the local markets, generate a large share of the total local television station industry revenue through the operation of strong affiliates in these local markets.

Of the $25.8 billion in gross revenue generated by these groups, $6.5 billion will be generated from retransmission consent revenue and over $1.1 billion will come from online/digital activities, BIA/Kelsey says.

LINK:	http://www.broadcastingcable.com/news/currency/biakelsey-station-reven...
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