Frances free-to-air commercial broadcasters will benefit from a sharp uptick in national advertising revenues next year, but still face severe structural challenges as the TV market fragments and the effects of new regulation kick in, according to Morgan Stanley.
The investment bank notes that RTL-backed M6 has outperformed the wider stock market by over 30% in the past three months and has weathered the recent downturn better than its larger competitor TF1. ÂTF1 has lost ad market share in this downturn, not M6,Â the bank noted.
Morgan Stanley expects TV ad spend to increase 8% next year and 3.2% the year after, but still says that structural changes to the French TV market mean that both M6 and TF1 will likely miss its earnings estimates.
These changes include audience share erosion, with lost audiences being a permanent, not cyclical, factor. Too much advertising inventory is another issue, the bank notes, especially in daytime where the quality of programming on the DTT and terrestrial channels is less noticeable.
Finally, the new tax levied on commercial broadcasters to replace revenuesÂ lost at France TÃ©lÃ©visions as it phases out advertising will Âdrag down any advertising revenue upturn in the long runÂ, according to Morgan Stanley.
ICYMI: UK streaming subs jump by 50% in 2020 digitaltveurope.com/2021/08/05/uk-… https://t.co/5cfyiroE9i
05 August 2021 @ 19:35:00 UTC
CVC buys 10% of LaLiga for €2.7 billion digitaltveurope.com/2021/08/05/cvc… https://t.co/55MtYj5dlW
05 August 2021 @ 18:00:00 UTC
Vevo Pop channel launches on rlaxx TV digitaltveurope.com/2021/08/05/vev… https://t.co/StFaR1zdzi
05 August 2021 @ 17:30:00 UTC