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TV Stations Revenues to Diversify, Grow 5-7% in 2010

TV station ad spending will grow by 5% to 7% in 2010, SNL Kagan predicts. That number may be conservative and could be more if auto continues to come back and political spending comes through on its early promise.

Automotive on the Upswing

Auto advertising in 2010 has been pacing up strongly in the high teens for some owners, and even up around 50% in the early going, after stabilizing in the fourth quarter following disastrous drops in the previous quarters of 2009. While the percentage gains are inflated given they are compared to Q1 2009’s reduced levels, it is still a positive trend to see auto dollars showing significant signs of life, the report says.

Despite coming growth, SNL Kagan predicts that overall ad dollars for TV stations will be less - by about $3 billion - in 2013 than in 2006. TV station revenues will be $21.7 billion in 2013, compared to $24.6 billion in 2006.

Still, revenue in 2013 will be up from less than $19 billion in 2009, and SNL Kagan analysis indicates an industry with positive momentum.

TV Station Revenue Diversifies

Traditional TV advertising will be more diversified in coming years. Local and national terrestrial television advertising will represent 84% of a TV station’s revenue in 2013, down from 97% in 2006.

Online revenues will jump from 2% of a TV station’s overall revenue in 2006 to 7% in 2013, while retransmission fees will grow from 1% in 2006 to 9% in 2013.

Based on expectations for increasing online and retrans revenues, that 16% from nontraditional sources is expected to continue to grow, with mobile interactive revenue also potentially contributing to the category.

“Based on our latest projections, TV station industry revenues could go from what was a 97 percent reliance on local and national terrestrial ad revenues in 2006 to a revenue mix of just 84 percent from terrestrial ad revenues by 2013 with 9 percent from retrans revenue and 7 percent from online revenues,” said SNL Kagan analyst Robin Flynn (via TVB.com).

“Based on expectations for increasing online and retrans revenues, that 16 percent from nontraditional sources is expected to continue to grow, with mobile interactive revenue also potentially contributing to the category.”