US TV prepares for $2bn ad shortfall

The US television industry faces a $2bn slump in advertising revenues during the next four years as advertisers turn away from broadcast and cable networks, according to a new report.

Digital video recorders that allow viewers to skip through commercials have knocked confidence in broadcast and cable advertising while younger, tech-savvy audiences are deserting their TV sets to spend more time online.

The Global Media Intelligence report by Screen Digest, the media research firm, says some of the decline will be clawed back by US TV networks by online video advertising, which it expects to triple during the next four years.

But with online video advertising representing only 2.2 per cent of all TV advertising, this will not be enough to offset the slump, exacerbated by the recession.

Screen Digest forecasts US broadcast and cable advertising revenues will fall from $69bn in 2008 to $67bn by 2013.

“We’re at an inflection point in the TV business model,” Arash Amel, one of the report’s authors, told the Financial Times. “Online video is not mature enough and won’t mature quickly enough to fill the gap left by the decline of traditional TV advertising.”

Source/Full Story: FT.com

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