Perhaps one of the largest swings attributed to the digital age can be found in television advertising. As people are offered more options for entertainment, advertising revenues have fallen. Of late, however, revenue streams have started to shift back toward innovative television companies that were wise enough to diversify their advertising base to accommodate this change. Although a risky investment to be sure, finding a media company that has worked to change their strategies toward revenue generation may quite possibly be a profitable one.
Grey Television Inc., a company operating as a television broadcast concern, operates 36 television stations in 30 broadcast markets. Its largest affiliation is with CBS, with which it manages 17 stations. The company also manages 10 stations with NBC and 8 stations with ABC. Additionally, the company operates within the digital television and internet spaces.
As one may suspect, the revenue generation aspect of broadcast television is experiencing a difficult period as it comes to terms with the transition to digital and computer oriented entertainment. Grey, however, has come to terms with reality and is approaching it with a multi pronged strategy. It offers typical television advertising, where approximately 66% of revenues are derived by local stations in a regional setting, national network advertising and internet ad banner sales. Advertising revenue is generally seasonal to the second and fourth quarters as associated with spring and the holiday season. Although advertising revenue issues are a continuing theme in the present economy and technical transition environment, the company does appear to be dealing with the situation well. Its position as the largest CBS affiliate also offers opportunity in a general sense as this offers “reach” for local and national advertisers.
Given current economic trends, the company cannot plead that a turn in economic circumstance is not under way. Revenues for the first three moth reporting period have increased in almost every respect. Although a bit more risk is involved in television investment and watching advertising trends is important, a shift may be occurring back toward companies that control both broadcast and cable operations. Grey Television is such a company and may well be among the first to benefit.