Tough economy might be good for broadcast TV

Tue Jun 24, 2008 9:24am EDT
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By Nellie Andreeva - Analysis

LOS ANGELES (Hollywood Reporter) - Broadcast TV has had a hard time catching a break this past year.

What was supposed to be a rebound 2007-08 season after the ratings slump of 2006-07 was derailed by the Hollywood writers strike and ended with a whimper in May. And, as if dealing with the 100-day stoppage and viewer erosion was not enough, the networks were hit by a slowing economy.

In the first quarter, when the effect from the strike was the worst, ad spending on network TV was down 3% vs. last year.

But then, in the past few weeks, amid recession fears and worries about a possible actors strike, there finally was some good news: The five broadcast networks bagged a better than expected $9.23 billion in "upfront" commitments for ad slots during the 2008-09 season.

"When times are tough and each marketing dollar has to work as hard as it can, (advertisers) go to what works, and television absolutely benefited from that," ABC ad sales chief Mike Shaw recently said.

Meanwhile, the Conference Board's most recent survey painted a bleak picture of consumers' buying intentions for the next six months. For instance, only 2.1% are planning to purchase a house, the lowest percentage in more than a quarter-century.

In contrast, the share of consumers planning to buy a TV set in the next six months hit an all-time high of 12.2 percent in May.

For those putting their dreams for a new home and car on hold, a flat-screen TV seems like a comforting alternative. It is also practical, with gas prices hovering above $4 a gallon.   Continued...

<p>A Georgian family watches President Saakashvili's interview on television in their apartment in Tbilisi November 4, 2007. REUTERS/Irakli Gedenidze</p>