Following several recent turnarounds on the outlook of radio advertising revenue, Merrill Lynch has today announced that it has also revisited the US TV revenue forecast and now expects this to outperform all previous predictions to grow by 8.3% this year.
The global analyst group said, several factors contributed to its boost in confidence, including – early and stronger than anticipated political spending, Olympics revenue now on target to meet or exceed goals and a record number of new car launches helping to increase advertising dollars.
On average, Merrill Lynch expects TV group revenues to grow by 9% during quarter two of 2004, this is relatively unchanged from previous predictions.
However in 2005, it is expected that lost political advertising spending could fragment media and offset any positive effect and therefore the full year 2005 forecast revenue has been reduced to 1%.
Although Merrill Lynch appears to have predicted a bright near-term future for the TV industry, an ML analyst said: “We maintain our neutral outlook on the TV broadcast industry, given limited growth prospects as a single-channel medium and increasing secular pressures from cable networks, cable TV interconnects, PVRs and declining sports coverage and reiterate our thesis that the spot TV industry needs to reinvent itself and uncover an additional source of revenue in order to survive increased competitive pressure.”
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