Long-Form Media Billings Rise 3.3 Percent in 2Q 20081 Oct, 2008 By: Shay Moftakhar Response
More than 500,000 timeslots are purchased as the average cost of a half-hour block falls below $620.
The total number of timeslots purchased shattered 2Q 2007's second-quarter record by 26,652. The total also shattered the all-time record of 474,158, set in 3Q 2007, by 26,151.
Despite the extra spending on national cable, the total number of timeslots purchased in that category declined by 19 percent, reducing its market share by 7.5 percentage points. In return, broadcast added 60,098 timeslots — a 21.2-percent explosion — pushing its total to 343,311 and increasing its market share by nearly nine points. Satellite has suffered since 4Q 2007, recently with an 11.9-percent loss, dropping its market share by just 0.5 points.
The record number of timeslots purchased forced the average cost of a half-hour block of time down to $619.73, a new all-time low. This figure is 2.2 percent, or $13.86, below 2Q 2007's figure. Had we figured this quarter's total billings using 2Q 2006's average cost of $734.71, total spending would have exceeded $367 million. The difference in cost for a timeslot is quite substantial.
Like everything else, spending in the top 30 markets also rebounded in the second quarter. Overall spending in the top 30 markets grew by $24.5 million, up 17.7 percent. During last year's second quarter, the top 30 markets accounted for 46.3 percent of total spending, while this year, those markets represented 52.7 percent of the total. The top 10 markets lost $834,100 — a slight 1.2-percent dip. Spending in markets 11-20 grew a mighty $16.7 million — a 41.5-percent jump. Markets 21-30 enjoyed an $8.7 million increase, good for a 29.5-percent boost.
Fig. 4 Second-Quarter 2008 Long-Form Media Distribution
As I stated a quarter ago (Response, July), "This year I will hold off on all predictions, especially in light of a strong first quarter in the midst of economic uncertainty." Now, we have a strong second quarter under the same circumstances, if not worse. It comes to light that two factors are key to which products (and companies) will fail and which will prevail this year —product price point and cash reserves.
Fig. 5 Number of Time Slots and Percentage of Total Time Slots Purchased in Second-Quarter 2008
In this shaky economy, the average consumer still needs his or her dose of retail therapy, but smaller. The firms dependent on big-ticket items will fall by the wayside, and those offering products at $19.99 or less will succeed. Likewise, those firms that can afford a large chunk of time for an inexpensive product will gain timeslots. The test for this formula should come when we collect third-quarter results. We'll know more in the next few months.
Fig. 6 Average Cost of a Half-Hour Block of Time Purchased in Second-Quarter 2008: $619.73