Underscoring a weak market for TV advertising, analyst Robert Fishman of MoffettNathanson Research has cut his forecast for Q2 ad revenue figures media companies will be reporting over the next few weeks.
Fishman said he expects Disney to report a 6% drop in cable ad revenues in calendar Q2 vs. his earlier estimate of a 3% drop. He also expects Paramount to report a 17% drop in cable ad revenue vs. the 15% decline forecast earlier, and AMC Networks’ ad revenue to be down 12% vs. 10%.
That would lower Fishman’s forecast for Q2 cable advertising revenue to $4.48 billion, down 12.3% vs. a year ago. Fishman’s previous forecast called for an 11.3% decline.
For the broadcast business, Fishman expects Paramount-owned CBS to be up 1.4% vs. an earlier forecast of a 2.4% gain, and for Disney’s ABC to be down 16% vs. his earlier forecast of a 15% drop.
Fishman now sees total broadcast ad revenues of $2.47 billion, down 8.3% vs. his earlier forecast of $2.48 billion, down 7.8%. Total national TV ad revenue is now expected to be down 10.9% to $6.95 billion vs. a drop of 10.1% to $7 billion, reports Broadcasting+Cable.
Meanwhile, Fishman sees ad revenue for the big direct-to-consumer platforms rising 19.7% to $2.26 billion.
Among the media company-owned streamers, Fishman sees revenue rising 67.8% Paramount Plus, 32.2% at Peacock, 29.8% and 4.1% at Warner Bros. Discovery’s Max and Discovery Plus. He sees Pluto TV revenue as down 3% and Hulu down 8% in the quarter.
Fishman also sees The Roku Channel growing 5.5% and the new ad-supported tiers for Disney Plus and Netflix generating $138 million and $119 million in Q2 ad revenue, respectively.
“While we have never put a whole lot of weight behind the outcome of the upfronts, this year’s is worth paying closer attention,” Fishman said. “Previously, advertisers were forced to hold their noses and accept CPM increases as lowered ratings also meant lowered supply, and alternative options for broadscale premium reach remained limited. This year, FAST channels and AVOD services are delivering a fresh pool of inventory, increasing supply, and cord-cutting and ratings declines outside of sports have eaten into just how much reach television is able to deliver.”
Given the TV ad slowdown so far this year, as well as some content reductions, MoffettNathanson also recently lowered Hulu’s revenue outlook as well.
The Disney/Comcast-owned streamer is now estimated to see a 10% decline to $3.12 billion this year vs. 2022. However, the firm projects Hulu’s advertising business will rise 5% to $3.27 billion next year before climbing another 5% to $3.44 billion in 2025. Subscription revenues will rise 12% to $8.17 billion this year.
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