Michael Nathanson

YouTube TV, the fast-growing virtual multichannel video programming distributor, is expected to post a profit for the first time in 2024, according to analyst Michael Nathanson of MoffettNathanson. Nathanson sees YouTube TV having operating income of $200 million in 2024, following a loss of $300 million in 2023. He sees net income continuing to rise, hitting $600 million in 2026.

Michael Nathanson slashes forecasts, sees national ad revenue down 2.6% in 2024 and plummeting 12.3% in 2025.

The television industry’s advertising business had a rough first quarter, prompting analyst Michael Nathanson to cut his forecast for the full year of 2023. The bright spot in the outlook is sports. The companies and networks that have strong sports-rights portfolios are doing better than those that don’t. That makes keeping sports perhaps more important than growing streaming revenue, which declined in the first quarter and is expected to grow a bit slower than expected in 2023.

While television executives optimistically expect advertising revenue to rebound in the second half of the year, MoffettNathanson senior research analyst Michael Nathanson, looking at the economic outlook and the scatter market, is questioning the industry’s conventional wisdom and popping its balloons. Instead of a rebound, Nathanson sees the industry facing a tough upfront and, in a new research note forecasts that 2023 TV advertising spending will be down 5% to $78.7 billion, compared to his earlier forecast of a 3.3% decline.

Signaling a wider macro-view of a possible slowdown in advertising, traditional TV-based media companies’ stock prices declined sharply after social media platform Snap said on Tuesday it is seeing a steepening deceleration of its digital ad revenues. Warner Bros. Discovery closed down on the day 7.8% to $16.86 and AMC Networks declined 4.2% to $38.51, while Fox Corp. was 5.1% lower to $30.00, Paramount Global dropped 3.9% to $31.80, and Walt Disney fell 4% to $101.55.

The penetration of streaming in U.S. households has expanded to 80% in the first quarter from 79% in the fourth quarter of last year, according to a new report from MoffettNathanson analyst Michael Nathanson. A year ago, in the first quarter of 2021, streaming penetration was 74%, according to data Nathanson uses from a monthly survey by HarrisX.

The future in which linear TV is driven almost exclusively by live sports, news and events has arrived, according to analyst Michael Nathanson after crunching numbers from Nielsen. “Time spent on cable networks built on movies, syndicated TV and kids content has collapsed over the past two years as consumers and media companies adopted a streaming first mind-set,” said Nathanson, senior analyst at MoffettNathanson, in a report Thursday.

Ad sales executives say that after a gangbusters upfront, fourth quarter scatter got off to a slow start, then had an early spurt as retailers wanted to get shoppers into their store now before facing the possibility of bare shelves. Advertisers are also looking to move some of the fourth-quarter inventory they bought in the upfront into the first quarter, when they’re hoping to have more goods for sale. MoffettNathanson research analyst Michael Nathanson Research also expressed concern that supply chain issues will affect media company revenues. (Freepik photo)

Analyst Michael Nathanson of MoffettNathanson, working with measurement and analytics company has come up with what he called effective RPU, a number that takes into account promotions and discount offers through distributors and aggregators, as well as revenue on ad supported tiers. Bottom line, Nathanson said Netflix leads the industry in effective RPU at $14.88. He attributed Netflix’s strong RPU to its high percentage of direct-to-consumer relationships and the maturity of its business model.

The deal that the Walt Disney Co. cut with Verizon to give Disney+ free to some Verizon mobile and broadband customers will result in nine million subscribers for the new streaming service in its first year, according to an estimate by analyst Michael Nathanson of MoffettNathanson Research.

Looking at the second-quarter financial and operating results released so far by cable operators, analyst Michael Nathanson of MoffettNathanson Research said cord-cutting has become “freaking ugly” and the headwinds faced by media companies have gotten “much worse.”