What are the better advertising trends and what higher sports expenses mean for the Hollywood revenue season
An analyst said that in the long run, “the bigger issue is the trajectory of the pandemic, the strength of the US economy, and how much improvement will be seen by 2021.”
According to Wall Street experts, amid the ongoing coronavirus pandemic, Hollywood’s third-quarter profitable season may be good news-bad news.
TV advertising revenue will fall again compared to the same period last year, but it is expected that the decline will not be as pronounced as in the second quarter.
This is generally considered to be the peak of advertising impact, thanks to the cancellation of orders at home, the return of live sports, and the pre-election Increase in political advertising expenditure.
MoffettNathanson analyst Michael Nathanson wrote in his performance preview report: “Despite the resurgence of sports, linear TV ratings continue to decline, while the price of disconnected TVs is still rising, but we expect As advertisers across the country return to the market, the growth of TV advertising in the third quarter will be even stronger.” Monday.
UBS analyst John Hodulik also predicts that the advertising business in the third quarter will see a “significant improvement
He explained in the earnings season preview on October 12:
“The latest comments from top entertainment industry executives point out that the market’s strong diversified market, including premiums, is due to the withdrawal of part of the advertising funds promised earlier this year. The quarter was redistributed.”.
As a result, Hodulik increased his advertising estimates in various areas for the quarter, and even predicted the advertising revenue of the cable television network divisions of Disney and Fox.
The analyst concluded:
“Nevertheless, we still believe that the absolute level of overall spending is declining, and we expect a decline of about 7{7d6bb1f761e691f027164c9fe6d1ebbc4659a250013ce39dc45a15ede39dbac5} nationally and about 10{7d6bb1f761e691f027164c9fe6d1ebbc4659a250013ce39dc45a15ede39dbac5} locally, including politics.
In potential further positive news, Nathanson predicts that despite continued layoffs, membership fee revenues across the industry will rebound.
This is mainly due to improved advertising trends, while Earnings before interest, taxes, depreciation, and amortization will decline and deteriorate as sports content costs increase.”
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