It has become increasingly difficult for the network television business to maintain profitability with a steadily shrinking audience and a financial model that relies primarily on one revenue stream, advertising.
According to Interpublic Group’s Magna, total ad spending on the four U.S. TV networks (ABC, CBS, NBC and Fox) totalled an estimated $17.2 billion in 2008, which was an increase of some 3.5 percent over 2007.
But with the recession in full swing, coupled with make good units that could total $100 million this season by some estimates, the business won’t get any easier this year.
Network and agency executives predict that in the face of continuing ratings erosion network TV sales will be down 7 percent or more in 2009.
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