Traditional TV network advertising from digital video platforms — Hulu, networks apps/Web sites and video syndicated online — is estimated to grow by 40% this year, now representing a 5% share of all its advertising revenue from video.
UBS media analyst Doug Mitchelson says digital video advertising for traditional TV companies is projected to get to $2.1 billion in 2016 — up from $1.5 billion in 2015.
Nontraditional TV companies — YouTube and others — will grab $6.5 billion in digital video advertising, growing 31.5% in 2016.
While nontraditional TV companies will maintain their dominance over TV networks in the coming years when it comes to digital video advertising, TV networks will close the gap substantially by 2020.
Then, it is estimated, TV networks will become a $6.3 billion digital video business that year — up 23.6% over 2019. Pure online video companies will get to to $11.5 billion, up 10.4%.
Mitchelson estimates that total traditional national TV advertising — broadcast, cable, syndication — will climb 3.1% to $42.6 billion — and 4.4% higher to $44.7 billion when including digital video.
For TV networks, digital video advertising revenue will have 5% share of all its video business — traditional and digital.
With regard to the the current traditional TV marketplace, Mitchelson writes that strong current TV scatter activity will continue into the second quarter of this year.
Total second-quarter national broadcast business — scatter and upfront deals — will grow 4.1% to $3.6 billion, with cable networks up 1.5% to $5.9 billion.
Mitchelson says the more than 20% higher scatter volume in the first quarter of this 2016 signals “a strong upfront” for next season in terms of volume and cost per thousand price increases.