A report from investment bank Jefferies says Australia’s media sector as a whole is “cautious”.
“Low visibility, linear TV continues to show weakness, offset by Broadcaster Video-on-Demand (BVoD), while content costs are rising. OML media has recovered to pre-Covid levels. It’s our top pick in this space because it’s the best,” says Jefferies.
“The media industry is entering a period of uncertainty in 2023 due to the slowing macroeconomic environment. Globally, there is a strong correlation between GDP growth and advertising spending, with our economists We forecast negative GDP growth from Q3 to Q3 2024. Paramount says Q4 will be worse than Q3 2022, and we are starting to see a softening in advertising spending. In Australia, channel checks show low visibility for Jan/Feb 2023. The only exception is JCDecaux, which sees healthy booking levels in Q1 2023. Australia Only if we can avoid a recession as we have in the past, we might actually see some growth in the advertising market,” suggests Bank.
“Whether we’re in recession or not, [Australian] Linear TV continues. Interim SMI data for November 22 shows that advertising spending in the Metro FTA fell by 5% year-on-year.for [technology company] A key debate between NEC and Seven West Media (SWM) is whether BVoD can offset this decline in FTAs. It’s possible in our base case, but when an advertiser moves from his FTA TV to her BVoD, there’s a risk of reduced ad spend. CPM he could be higher for BVoD, but its audience base is so targeted that the absolute numbers could be much lower than his FTA TV . It is also interesting that the BBC has decided to scale back its linear broadcasting service over the next decade and consolidate all its activities under one brand. In terms of ratings, NEC has outperformed SWM in recent months,” said Jefferies.