Role of advertising declines for TV networks

15 September 2010

PARIS: The contribution of advertising revenue to media owners in the television sector is set to fall over the next two years, even as demand strengthens in the economic recovery.

IDATE, the research firm, estimated the entire TV market was worth €259.3bn ($336.9bn; £217.2bn) in 2009, a 0.5% decrease from 2008.

Adspend contracted 7.9% last year, offsetting a 6.9% uptick enjoyed by paid-for services and a 3.7% increase in public funding.

Up until 2008, advertising generated 48% of broadcaster's income, while subscription platforms were on 43%, and licence fees and similar initiatives took 9.4%.

But pay-TV delivered 46% of returns last year as advertising slipped to 44%, and IDATE predicted this trend would continue, with paid-for services reaching 48% in 2014.

Overall, TV performed comparatively well in 2009, maintaining its 41% share of total media expenditure, as investments across all channels dropped 11%.

Newspapers recorded a slide of 17.8% last year, and the proportion of revenues held by press titles has tumbled from 44.7% to 37.4% between 2006 and 2009.

The web benefitted as a result, posting a 3% improvement in ad sales last year, and boosting its share to 12.8% in 2009, measured against 7.2% in 2006.

Data sourced from Le Figaro; additional content by Warc staff