No need to worry about the startling decline in NFL ratings this year — or many other perceived threats to broadcasting — CBS Chief Research Officer David Poltrack told investors today at his annual state of the industry report for the UBS Global Media and Communications Conference.
Although the early season fumble in football ratings was “quite a shock,” it was mostly due to “incremental competition from coverage of the presidential race,” he says.
Since the end of the election, NFL “ratings are still running below last year, but the gap is narrowing” As a result, there’s “no reason to conclude a seminal change” has taken place in the appeal of TV’s most popular programming.
Poltrack also assured Wall Street that broadcasters have little to fear from the growth of online streaming.
He sees a movement “away from [viewing on] smart phones and tablets to connected TVs.” Indeed, most Netflix viewing now takes plave on a TV set.
And that should help broadcasters, especially as Nielsen rolls out digital ratings in early 2017.
“If someone is watching a television show on a television set from an [over the top streaming] source, is that not television viewing?” he says.
Major advertisers are souring on internet video providers’ pitch that they can target ads effectively and are warming to broadcasters’ boast that they have the broadest reach.
Proctor & Gamble is leading the move back to traditional TV and “many other [consumer products] companies are following P&G’s lead,” Poltrack says.
Google and Facebook “don’t want transparancy,” the CBS exec adds. “It’s going to be very difficult for ad agencies to look at these things.” And YouTube “doesn’t have much inventory” to sell advertisers who want to associate with premium content.
“Long form video is where the action is in the digital sector” he says, with ad growth “coming as much if not more from digital display advertising as from television advertising.”
As a result, Poltrack would like to see digital video revenues counted in “a category of its own” instead of either digital or television.
Meanwhile, broadcasters have less to fear from DVRs, where viewers frequently skip ads. TAlthough DVR viewing accounts for more ratings points than any individual network in prime time, growth “has hit a threshhold at about half of all U.S. households.”
And with cable cord cutting and shaving VOD viewing has declined for the last two years.
Last year Poltrack ambitiously forecast that network television ad revenues would grow 9.5% this year, or 5% if you take out the Olympics. He just trimmed that to 8% and 4%.
“The economy was not strong for the first half of 2016, and only began to turn in the positive direction in the third quarter,” he says. “Tepid GDP and consumer spending results provided an unstable foundation for the advertising market at that time. The uncertainty around the unfolding Presidential race also was a factor.”
For 2017 he anticipates flat growth in overall network TV ad revenues, translating to a 4% increase vs 2016 when you take out the Olympics.