TV GROUPS COULD LOSE 3% TO 8% IN AD SALES DUE TO CORONAVIRUS

TV network groups such as The Walt Disney Company could lose 3% to 8% in advertising revenue from the second quarter of this year through early next year due to coronavirus concerns, media analysts told Mediapost.

“The bad news is we expect Covid-19 to cause a dislocation to advertising demand. This will be driven by a number of factors including: supply chain/inability to satisfy demand, and demand suppression for many important product categories,”  said Todd Juenger, media analyst at Bernstein Research, writing about Disney.

The worst-case scenario would mean Disney could see lower advertising growth by 3% in the second quarter of this year, and 8% in the third quarter through the second quarter of 2021. The best-case scenario is a 2% reduction to a 5% slide through the end of year.

On the positives side, other media analysts are talking about an increase in TV consumption as consumers stay home, either from work or to avoid big crowds. Another side benefit is that, to the extent people keep their jobs, they are also probably less likely on the margin to cut the cord.

On the other hand, as this is an Olympics year, Disney will be affected in terms of TV advertising sales if the Games continue to go ahead. So far, the International Olympic Committee is still planning for the games to run in late July / early August. "Disney, specifically, is theoretically more exposed to the impact of competitive sports on other networks, given ESPN,”  Juenger said.