With No Olympics or Presidential Election, 2005’s a Tough Year

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NEW YORK ( -- Third-quarter ad revenue plunged 21.5% at the big three broadcast networks, according to the Broadcast Cable Financial Management Association, which releases figures for ABC, CBS and NBC that are compiled by auditor Ernst & Young.

Most of the $605 million third-quarter revenue drop was due to a $707 million decline in sports advertising as 2005 isn’t an Olympics year. Prime-time advertising brought better news, growing 8.5%, and the morning daypart was up 6%.

Super Bowl on Fox
Total season-to-date ad revenue dipped 8.3% from the same period last year, largely because 2004 not only included the Summer Olympics (broadcast on NBC) but was also a presidential election year. Both events saw considerable ad spending through the third quarter last year. Another likely contributor to the drop is that Fox hosted this year’s high-dollar Super Bowl and the News Corp.-owned network doesn’t report its revenue figures to the BCFM.

CBS will soon split off from Viacom to be part of CBS Inc.; ABC is part of Walt Disney Co., and NBC's parent is General Electric Co.

Cause for concern
Despite accounting for Olympics and elections, the networks slow growth should still cause concern, noted economist Mark R. Fratrick, VP of BIA financial network and a BCFM board member. Compared to the non-Olympics year of 2003, season-to-date 2005 revenue are up only 3% -- that’s behind GDP growth he said.

BCFM CEO Mary Collins said the growth patterns make it “more important than ever for these networks to look at new growth opportunities. Gen X and Gen Y consume media way differently than people traditionally have. The networks have begun to take this seriously and I’m pleased to see that.”

In the 2005 upfront selling season, broadcast networks were slightly down from the previous year, at $9.1 billion. However, BCFM figures offer a more accurate picture of the networks’ financial health than upfront sales because they come directly from the networks and because advertisers reserve the right to cancel upfront buys throughout the year. Advertisers also buy TV ad time in the scatter market.

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