‘Deteriorating Prospects’ For Media Sector

‘Deteriorating Prospects’ For Media Sector

The entire media sector has been substantially downgraded by analysts at ABN Amro, following the attacks on the US on Tuesday 11 September. The broker says that the outlook for advertising has deteriorated ‘significantly’ in the two weeks since the tragedy and there will be a negative short-term effect, particularly for broadcasters.

ABN is now predicting a 1.6% decline in global adspend growth for 2002, although admits that this is by no means certain. For media companies, this continuing decline in advertising represents an increase in the danger of ‘financial distress’ throughout the sector. Advertising-led companies are to be hardest hit; the professional publishers are likely to be the least affected.

It could be up to six months before the full effects of the tragic events in the US are felt on the media industry. In the meantime, the markets are likely to discount the worst, creating an even greater downside, says the broker.

For broadcasters, schedules have already been affected by coverage of the terrorist attacks on New York and Washington, leading to diminished advertising revenues. Add to this the fact that many advertisers are now reassessing the content and volume of their planned campaigns and the outlook for the television sector looks even bleaker and more uncertain. Campaigns are being cancelled and scaled back following the attacks.

Subscribers to MediaTel Insight can access more national and international media analysis, forecasts and news. For subscription details please visit the site.