Local TV Sees Uptick In Online Ad Revs

 

               by Wayne Friedman, 7 hours ago                                            

Online ad revenues for local TV stations will continue to climb in the coming years -- but slowly, rising under a 7% share of all advertising dollars. In 2014, online revenues were 4% of all stations' TV revenues -- growing to 6.4% by 2020, according to local media advisory BIA/Kelsey.

This year, online advertising for TV stations is estimated to total $1 billion, rising to $1.6 billion. From 2015 through 2020, it is expected that revenue could grow at a compounded annual growth rate of 11.4%.

It’s estimated this year's total local TV advertising revenues will be $21.9 billion -- dipping next year to $21.0 billion, then rising again to $22.4 billion (2018); sinking a bit to $22.2 (2019); and then rising sharply to $24.6 billion (2020).

Overall, BIA/Kelsey says local TV advertising revenue will grow 2.75% to 3% over the next few years.

In 2020, political advertising is expected to fuel growth due to another presidential election, as well as a Summer Olympics. BIA/Kelsey says in that year, local TV will still command the lion’s share of local media advertising spending at a 65.6% -- down from its 67.6% share this year.

Local TV stations will also benefit from retransmission fees, with gross retransmission payments rising from $6.3 billion this year to $8.5 billion in 2020.

Typically, local TV stations keep about half these retransmission fees -- paying their respective networks as part of their affiliation deals. Net retransmission payments to stations will go from $3.4 billion in 2016 to $4.4 billion in 2020.