Ryvicker: Local Broadcast TV Is Here To Stay

Despite an unstable economy and increased competition, traditional television is apparently holding its own in getting its share of advertising dollars.

“The investment community thinks broadcast TV is going away, but we are not seeing that,” says Marci Ryvicker, who covers media for Wells Fargo Securities.

“You still have growth in the industry and that’s a really important concept.”

Ryvicker’s remarks were part of a panel on the media economy moderated by TVNewsCheck Editor Harry Jessell this morning at the TVB Forward conference in New York.

Despite small fluctuations, the nearly 25% of total advertising dollars being spent on TV this year is relatively close to the percentage spent in previous years, Ryvicker says. The percentage of ad money going to newspapers and radio is down, with some of that money being redirected to the growing mediums of cable and the Internet.

National spot advertising is expected to be up 16.2% this year, and local spot sales are expected to grow 8.4%, primarily due to political advertising.

And although those figures will decline significantly in 2013, when stations won’t have the benefit of election spending, Ryvicker says she believes broadcast TV ad revenue will continue to rise. Much of next year’s growth is expected to come through local spot sales to the auto industry.

“As long as auto sales are going up, we will see growth in advertising,” she says, adding that about $900 per car sold is spent on advertising.

However, fellow panelist Michael Nathanson, managing director of Nomura Securities International, says he is “somewhat nervous” when looking at recent advertising trends, such as a widening gap between TV ratings and advertising dollars.

“What it says to me is that the national advertisers have been caught flat-footed during the last couple of upfronts. I do worry about the broadcast networks,” Nathanson says. The four national networks are expected to grow by 5.7% this year but not at all in 2013, he says.

Cuts in healthcare and restaurant advertising are of particular concern, the panelists say. “We are living on autos, we are living on government and hopefully retail,” Nathanson says. “These are categories we are counting on.”

Nonetheless, Ryvicker says she’s still bullish on the staying power of broadcast television, which stands apart from other media by offering the local news and programming viewers want.

“I don’t think it’s replaceable,” she says. “It may be rocky along the way. But I really believe in the industry.”