Future of TV Briefing: advertising performance of TV and streaming companies in the first quarter of 2024

As this year’s prepaid advertising negotiations begin, the traditional TV advertising market continues to recover, while the streaming advertising market remains in decline, according to the latest quarterly earnings reports from television and streaming companies. growth phase, but still needs to catch up. for the first three months of 2024

Here’s a quick summary of companies’ ad revenue for the first quarter of 2024 compared to the first quarter of 2023. Disney and Netflix do not appear on the list because neither company reports its ad revenue.

• AMC Networks: -13% year-over-year change in advertising revenue
• Fox: -34%
• Fubo: +21%
• NBCUniversal: Flat
• The most important: +17%
• Roku (platform revenue, which mainly consists of advertising revenue): +19%
• TelevisaUnivision (USA): Flat
• Warner Bros. Discovery: -8%
• Vizio (platform revenues, which mainly consist of advertising revenues): +27%

To summarize the list, companies whose advertising business relies primarily on traditional TV had a difficult quarter, while streaming-oriented companies had a good period. Not exactly a shock, but still. Thus, the decline and rise in advertising revenues of Fox and Paramount was influenced by the fact that the former hosted the Super Bowl last year and the latter this year. But that’s what it’s like in the traditional TV business (and why companies pay billions for NFL rights).

But now let’s look at companies’ raw ad revenue for the first quarter of 2024, and this time let’s organize the list by revenue amount.

• The most important: $3.1 billion
• Warner Bros. Discovery: $2.2 billion
• NBCUniversal (USA): $2.0 billion
• Fox: $1.2 billion
• Roku (platform revenue, which mainly consists of advertising revenue): $754.9 million
• TelevisaUnivision (USA): $399 million
• Vizio (platform revenues, which mainly consist of advertising revenues): $159.6 million
• AMC Networks: $140 million
• Fubo: $27.5 million

It’s probably also no surprise that traditional TV network owners have largely overtaken streaming companies, but it’s still notable. This also applies to owners of traditional television networks.

Paramount’s streaming advertising revenue grew 31% year-over-year, but the segment represented only 17% of total advertising revenue. WBD experienced similar dynamics, but to a greater extent. Max’s parent company saw its streaming ad revenue grow 70% year-over-year, but that revenue represented just 8% of the company’s total ad revenue.

The situation was similar for other major owners of television networks.

“The growth (in streaming advertising revenue) was offset by some weakness in our linear network,” TelevisaUnivision CFO Carlos Ferreiro said on a quarterly earnings call.

NBCUniversal’s parent company, Comcast, doesn’t stand out among traditional TV ad revenues. However, during the quarterly earnings call, Comcast’s chief financial officer said the company saw “strong advertising growth on Peacock, offset by lower advertising revenues on our linear networks.”

Disney also seemed to experience the dynamics of linear and streaming advertising. Again, the company doesn’t report advertising revenue, but in its most recent quarterly report, Disney said the decline in traditional TV advertising revenue in the U.S. “can be attributed to a decline in views reflecting lower average viewership, partially offset by higher rates.” Meanwhile, the streaming ad unit saw an increase in ad revenue “due to higher views, partially offset by lower rates,” according to the earnings report.

Also notable is how Roku and Vizio have overtaken AMC Networks, which as a primarily cable entertainment group appears to represent the traditional TV middle class. WBD would be just another entertainment cable group if it weren’t for the fact that its ownership of the major sports rights – NBA (for now), March Madness, MLB, etc. – helps stabilize its advertising business. It also helps explain why sports are so firmly at the forefront of the market and why streaming companies like Roku and Amazon are snapping up sports rights.

As Disney CFO Hugh Johnston said on the company’s recent earnings call in response to a question about its streaming advertising business: “Overall, the advertising market is quite healthy right now as we approach early developments. Things are certainly going very well in real life and in sports.

What we heard

“We conclude many direct contracts related to sports. Sports have their own rhythm. We advise our customers to buy sports in advance this year as we believe demand will be much higher and it will be difficult to please all the different players.

— Director of a television network