TV’s scatter market has gone from bad to worse as advertisers curtail extra spending

Three months ago, media companies warned investors that the TV scatter market was slowing down.

And they thought it was bad then.

This quarter, the scatter market—i.e., all the ads on linear TV that advertisers don’t commit to buying during upfronts negotiations—has slowed considerably from a quarter ago, according to Standard Media Index.

• In the third quarter, scatter spend on traditional TV was down 38% year over year, according to SMI.
• That’s compared to last quarter, when scatter was down 17% YoY.

The pullback is causing additional strain on the TV advertising business, executives have told investors.

“The reality is that the scatter market has been pretty dry right now,” Jean-Briac Perrette, Warner Bros. Discovery’s president and CEO of global streaming and games, said this month. “It’s not a very constructive environment right now, as you have heard from a number of other players, peers, and across the broader advertising market.”

Not uniform: Pullback appears to be uneven. Fox Corp. “observed some softness” in the linear entertainment scatter marketplace, CEO Lachlan Murdoch told investors, but was seeing “healthy scatter demand” in news and sports, CFO Steve Tomsic said. At Paramount, the scatter market is softer in digital than in traditional TV, CEO Bob Bakish said.

Brace yourself: And as macroeconomic uncertainties and inflation concerns weigh on the industry, there’s no way to know when it’ll let up. “We expect these conditions to be temporary,” Roku CFO Steve Louden told investors, “but it is difficult to predict when they will stabilize or rebound.”—KS