Hollywood Strikes Prompt 22% Decline in Combined Ad Spend for Films, TV Shows and Streaming Services

The Hollywood strikes caused advertising on films, TV shows and streaming services to plunge 22% year over year to $2.9 billion between May and October, as studios were forced to reshuffle their content slates and spread out their backlog of programming, new data from MediaRadar reveals.

But the impact on television and streaming services was more severe than for films, which the ad intelligence firm attributed to more available inventory to advertise due to an influx of movies produced immediately after the COVID-19 pandemic.

“Even if people were willing to go back to theaters a year ago, there weren’t that many films coming out because they had been shut down for a couple of years in 2020 and 2021,” MediaRadar CEO Todd Krizelman told TheWrap.

Advertising spend allocated to TV shows and streaming services during the six-month period fell 27% to $784.7 million year over year, and 28% to $894.6 million, respectively, compared to $1.1 billion and $1.2 billion during the same period a year ago. Ad spend on films totaled $1.2 billion, down 12% from $1.4 billion.

Films, TV shows and streaming services invested a combined $5.5 from January through October 2023 to advertise, an 8% year-over-year decrease from the $6.1 billion spent during the same time in 2022. 

For the nine-month period, advertising spend allocated to film grew 5% year over year to $2.3 billion, while TV show spend fell 13% to $1.6 billion, and streaming service spend fell 18% to $1.6 billion.   

“Anything that was not sports and that was not already on a fixed calendar basically was spread out,” MediaRadar CEO Todd Krizelman told TheWrap. “The rates people were willing to pay were lower because the content was less fresh and the audience size is presumably a little smaller during this period of time.”

Nearly 11,000 brands invested $42.6 billion on TV ads during the nine-month period, an 11% year-over-year decrease from the same period in 2022. The total number of brands spending on advertising decreased 4% from 11,400 during the same period last year.

“A lot of them shifted to YouTube and social media,” Krizelman added, noting that YouTube and Meta had “unexpectedly strong quarters while very few other people did.”

Combined ad revenue from TV talk shows and sitcoms for the nine-month period was flat year over year at $4 billion, but fell 6% year over year during the strikes to $2.24 billion from $2.38 billion.

TV talk shows dipped 6% to $759 million, while TV sitcoms were flat at around $3.2 billion in ad revenue.

As for TV programming times, primetime television ad spend dropped 12% year over year to $18.1 billion during the nine-month period, while late night slid 20% to $3.7 billion.

As for the strike period, TV talk show ad revenue fell 9% to $444 million and TV sitcom ad revenue fell 6% to $1.8 billion.

Primetime TV fell 10% year to $10.4 billion, while late night TV dropped 18% to $2.1 billion.

Losses should reverse in 6 months but could remain sluggish for broadcasters

As Hollywood productions ramp up again, Krizelman anticipates that the ad revenue losses should be recovered in the next six months. But he warned that it could easily take a year for some of the brands that left to return, citing seasonality as one major factor.

“If you’re YouTube or TikTok or Meta, who really added new customers, you’re going to be working very hard to make them happy and to lock them in. So I don’t think it’s guaranteed that it all bounces back for the broadcasters,” Krizelman said. “It’s a little bit of a wait and see.”

In addition to the strikes weighing on ad spend, the legacy studios are in a competitive market and tightening their belts as they chase profitability in their streaming divisions, Krizelman said. He expects studios to take a closer look at where they create content going forward.

“In earlier years, it was just grow at any cost,” he said. “The largest studios will almost certainly learn from this experience and they will do what Netflix has been doing for years, which is moving more and more of their business out of the U.S.”

While linear television continues to be in secular decline as cord-cutters ditch pay TV for streaming, Krizelman sees the pendulum swinging back in its favor as networks release new content.

“We can expect to see some reinforcement that broadcast and cable television is valuable,” he said “It drives an enormous amount of profit and so I would expect the kind of content we’ll see will either be as good or better than it’s been.”

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