Now come the upbeat revenue projections

Now come the upbeat revenue projections
Bolstered by an improving economy, the Olympics and a Presidential election year, broadcast groups are making rosy revenue predictions for 2004. A report in MediaPost’s MediaDailyNews says station groups like Belo, Scripps and Gannett are all expecting solid revenue growth next year. This is all well and good, but there’s a trap in getting too comfy in our shortsightedness. As noted a month ago, the threat posed to television affiliate groups by the growth of DVRs is a significant and insurmountable obstacle in the long term health of TV station groups. SG Cowen analyst James Marsh downgraded four media companies and lowered financial performance estimates for the seven he tracks, based in large part on the DVR threat. Mr. Marsh told me today that he, too, expects 2004 to be a good ad spend year. Stocks should react well, he said. “But the issue still is DVRs,” he added. “People will get more nervous as penetration rates improve.” Then, he says, the market — which tends to discount future growth rates — will start to look ahead.

Looking ahead isn’t something the TV industry does very well, as noted in my most recent essay, 2004: Time For Action. While we’re basking in the glow of all that money, let’s not forget to use some of it to invest in the years after 2004.

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