National TV Market March and First Quarter 2020: Covid-19 begins to bite


Author: James Fennessy
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The effect of Covid-19 on advertising and media industries were first felt with the final three weeks of March, impacting the revenue of the month and to a lesser extent first quarter 2020. SMI’s AccuTV Broadcast Report for the month and quarter point this out. James Fennessy, the CEO of Standard Media Index says, “In March we began to see the impact of Cov-19 on the advertising marketplace. SMI with its unique ability to accurately measure the ad marketplace, will be able to know not only how deep the economic slowdown will be, but also when the ad marketplace will rebound”.

Introduction: When compared to the previous year, SMI reports, ad revenue of national TV (broadcast, cable & syndication) in first quarter 2020 was $10.84 billion, a decline of -5.4% from first quarter 2019. By comparison, the ad revenue for national TV in March 2020 was $3.78 billion, a year-over-year drop-off of -12.8%. As expected, the 2019-20 broadcast year-to-date had a more modest loss of -3.2% based on $23.73 billion. The decline occurred in broadcast and cable TV, the ad revenue from syndication increased.

March 2020: In March 2020, the ad revenue for broadcast TV was $1.16 billion, a decrease of -19.3% from last March. The primary reason was the loss of live sports programming which began on March 11. No broadcast network was impacted more than CBS, which along with cable partner Turner, televises the annual NCAA Men’s Basketball Tournament which was cancelled. Typically, over three weekends, the tournament delivered had a cumulative audience of 100 million viewers each year. Last year, SMI found the 67-game tournament collected $648 million ad dollars, a significant revenue loss which will be hard, if not impossible, to recapture. As a result, CBS reported a decline in ad revenue of -48.1%. Nonetheless, CBS still ranked second in ad revenue among broadcast networks at $283.6 million.

Despite the loss of “March Madness”, CBS was the top-rated broadcast network in prime time throughout March.

CBS was led by such popular procedural crime dramas as the NCIS franchise, FBI, FBI Most: Wanted and Hawaii 5-0. For entertainment shows only, CBS was the only English language broadcast network to report year-over-year increase in ad revenue at 6%, indicative of their strong primetime schedule.

NBC also reported a year-over-year decline (-7.6%), but garnered the most ad revenue among broadcasters at $317.8 million. Despite the pandemic and absence of live sports for the final three weeks, the ad revenue for both Fox (+3.6%) and ABC (+2.6%), had a slight uptick when March 2020 is compared to March 2019. With viewers being quarantined, Fox on March 29 televised the iHeart Living Room Concert for America, hosted with Elton John and featuring an all-star cast of performers. The one-hour benefit concert for Covid-19 relief averaged an above time-period audience of 4.6 million viewers and raised over $10 million. There will be similar type programming in the months ahead as the pandemic continues. For the Spanish language broadcast networks, Univision grew revenue by +2.4% and Telemundo reported a slight decline of -0.6%. Overall, year-to-year, the entertainment programs on broadcast TV in March 2020 was a relatively flat at (-1.2%) with revenue approaching $825 million.

With premiere sporting events cancelled for the last three weeks of March (NBA, NHL NASCAR, EPL, MLS, etc.), ad revenue for the genre plummeted by -75.5%, falling from $391 million in March 2019 to just $96 million. Without any prominent live sports airing in April, the decline will be even steeper.

News in March 2020 began with the “Super Tuesday” primary and ended with millions of viewers seeking the latest information on Covid-19. As a result, ad revenue for broadcast news programming grew by +15.4%. TV’s longest running prime time program 60 Minutes on CBS averaged over 10 million viewers for the last three telecasts in March (post pandemic outbreak).

In addition, since the pandemic, the ratings for all three evening newscasts are up over 40% from last year. For the first time in years they have been averaging over 30 million viewers each night. The broadcast networks also began televising a series of primetime specials covering the latest news on Covid-19. SMI reports with ad revenue totaling $239.9 million, in March 2020, broadcast news had more than doubled the ad revenue of broadcast sports.

Looking at cable television for March 2020, SMI reports that even though ad revenue for cable sports dropped by -43.2%. ESPN, despite no live sports for the final three weeks of March, led all cable networks in ad revenue at $166 million, an increase of +2.7%. While ESPN is a destination channel for sports, the network has not televised the NCAA Men’s Basketball Tournament game in nearly forty years, helping to sustain ad revenue. (Although the cable network televises several NBA games each week which were postponed on March 11.)

The two cable networks hardest hit with the loss of “March Madness” were Turner Broadcasting’s TBS and TNT. The ad revenue for TBS tumbled by -59.3% compared to March 2019. TBS had led all cable networks in ad spend in March 2019 with $227.5 million but fell to fourth with $92.5 million in March 2020. In March 2020 TNT, which televises the tournament (and NBA games), saw revenue drop by -28.6% to $97 million.

According to SMI’s AccuTV Broadcast Report, the cable network with the sharpest year-over-year increase in ad dollars was another Turner network; CNN. With fears of Covid-19, CNN’s with its wall-to-wall coverage of the pandemic reported an ad revenue growth of +18.7% in March 2020 reaching nearly $72 million. For the latter part of March, CNN’s audience delivery had more than doubled from the previous month. Fox News, cable’s top-rated network, also saw substantial audience gains. As for ad revenue, the gains were more modest, with an increase of +4.8%. Fox News ad revenue totaled $78 million for the month, the sixth highest. Collectively, cable news programming had ad revenue growth of +3.0% in March.

HGTV continues to be a top tier network in both ratings and revenue. The Discovery owned network despite reporting a year-over-year decline in of -5.9%, ranked second in ad revenue with just under $100 million. TLC, another top tier, Discovery owned network, reported a strong year-over-year increase strong increase of +8.9%. In the months ahead, these networks should do well, as quarantined viewers look for alternative viewing sources as an escape from pandemic news. Conversely, USA continues to struggle, the network reported an annual ad revenue drop-off of -9.0%.

First Quarter: In first quarter 2020, the impact of Covid-19 was less prevalent. Ten of the thirteen weeks in the quarter were completed before measures were taken with the pandemic and quarantine. Such programming crown jewels as The Super Bowl, Grammys and Oscars ran as scheduled helping to maximize ad revenue. As a result, the revenue loss when compared to first quarter 2019, was not as great as those in March. SMI reports, broadcast TV reported a decline of -3.8% for total ad revenue of $4.24 billion and cable TV ad revenue was -7.3% totaling $6.16 billion. The ad revenue for syndication jumped by +7.1% reaching $435 million.

The network that airs the Super Bowl will always have a great financial quarter with advertisers. In 2020, it was Fox, which generated $1.06 billion for the quarter, nearly double (+90.5%) from first quarter 2019. Surprisingly, CBS despite a year-to-year decline of -37.3%, was a close second with $1.05 billion in revenue. Despite having the NCAA Tournament wiped out, the network televised four NFL postseason games, including the AFC Championship Game, the Grammys and has a strong day-to-day programming lineup. Both NBC (-2.1%) and ABC (-0.7%) reported slight ad revenue losses. Looking at Spanish language networks, Univision, at $204.4 million, had more than double the ad revenue of Telemundo at $96.9 million. For the quarter, Univision’s ad revenue was up by +3.8%, while Telemundo was down by -7.4%.

With primetime entertainment programming, top-rated CBS generated $478.9 million in ad revenue edging out NBC and ABC. CBS was also the only broadcast network to grow revenue in the quarter at +3.2%. With a full quarter, the loss in ad revenue of sports programming was “only” -11.6% for broadcast TV and -18.9% for cable TV. With a number of political primaries combined with impeachment hearings and the pandemic, ad revenue for broadcast news in first quarter grew by +11.8% with cable news up by +3.0%.

Once again, ESPN generated more ad revenue than any other cable network. In first quarter 2020, ESPN televised a number of top-rated college football bowl games, numerous college basketball games and the NBA. The Disney owned network generated $587.3 million in the quarter, an increase of +6.7%. ESPN’s total was also more than double HGTV which ranked second at $244.3 million (-3.8%). As expected with no tourney, TBS (-37.3%) and TBS (-16.7%) reported the largest declines in ad revenue of any major cable network. There were three other networks which reported year-to-year percent double-digit declines in ad revenue including two general entertainment networks whose ratings have been dropping, USA (-15.5%) and AMC (-14.4%). The ad revenue for Discovery was down by -10.6%.

Despite the loss of sports, with viewers forced to stay home, TV usage has been in the upswing benefiting both news and entertainment. For the week of March 23, Nielsen reported the average viewer watched 41 hours of TV, an increase of eight hours from the same week in the previous year. Consumers are playing more video games, subscribing and watching more streaming content such as The Tiger King on Netflix and recent theatrical released movies available on-demand. In second quarter there will be three new ad supported video streaming video services launched. James Fennessy says,

“the first ten weeks of 2020 could very well be an end of era in how consumers interact with media. What impact it will have on the ad marketplace especially with prominent product categories will be closely scrutinized”.

About Standard Media Index

 Standard Media Index is the most trusted source of advertising pricing and spend data in the marketplace. SMI accesses actual invoices from the world’s largest media buying groups, as well as leading independents, and then organizes that data to create a clear, granular, and easy-to-use database for our clients and agency partners. By aggregating this data, which accounts for 70%+ of all agency spend, SMI offers detailed ad intelligence across all media types, including Television, Digital, Out-of-Home, Print, and Radio. Data can be broken down by ad types, publishers, product categories, and other dimensions. Our data supports insights covering 32 countries around the world. For more information and resources visit www.standardmediaindex.com.

Methodology

SMI sources our data from the raw invoices from the media agency holding groups to see the actual dollar amounts spent on each ad buy. We work with 5 of the 7 major media holding groups and leading independents – making up 70% of the National TV market. Using SMI real prices paid on spots and combining that with occurrence data from Nielsen Ad Intel, SMI models out the full 100% of the spots in the TV marketplace within Nielsen’s coverage. Market share percentages are comprised of the approximately 130 national TV networks we measure.

For more information, contact 

James Fennessy, CEO

646-283-6646

james@www.standardmediaindex.com