The Future of Advertising Adapting for an Uncertain Future
Christopher S. Ripley Chief Executive Officer Sinclair Broadcast Group, Inc. May 3, 2019 Over the last four decades, broadcast TV has lost most of its audience to cable As result, the TV audience has become highly fragmented
M-Sun Total Day Top 20 Cable/Broadcast Net Audiences 26%
FOX Affiliates ABC 4% Univision Affiliates Affiliates NBC 2% 7% Affiliates CBS Affiliates 7% CW Affiliates 8% 2% ION Affiliates 1% Telemundo Affiliates Estrella Affiliates 1% 26% 0.2% FOXNC 3% Azteca America Affiliates 0.1% NICK All Other Cable Networks 3% 30% TNT 2% MSNBC 2% CNN 2% HGTV ADSM 2% 2% NAN 2% Hallmark Movies & Mysteries 1% AMC Regional Sports Investigation TOON Networks Discovery 1% FX HIST DISC Me 2% 2% 2% TV Land Classic 1% 1% AEN 1% TV 1% USA ESPN 1% HALL FOOD1% TVL TBSC 2% 2% 1% 1% 1% 1% Timeline of Popular OTT Streaming Services
Amazon Prime Sling TV Netflix Apple TV+ Video DirecTV Now Crackle Xumo Pluto YouTube TV Disney+ Hulu The Roku Channel
2005 2010 2015 2020
Showtime AT&T Warner Starz Media HBO ESPN+ Now Discovery/BBC Service CBS All Access Digital advertising is skyrocketing while broadcast TV advertising is stagnant
Local and National Ad Revenue Change Over Local Ad Revenue Change Over Time ($M) Time ($M) 2007-2018 2007-2018 Local Spot TV Local Cable (inc. RSN) Local Digital
All Broadcast All Cable All Digital $45,000 $40,000 $100,000 $35,000 $30,000 $90,000 $25,000 $20,000 $80,000 $15,000 $10,000 $5,000 $70,000 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $60,000 National Ad Revenue Change Over Time ($M) $50,000 2007-2018 National Broadcast (inc. Political) National Cable National Digital $40,000 $60,000
$50,000 $30,000 $40,000
$20,000 $30,000
$20,000 $10,000 $10,000
$0 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Digital video ad spending is fastest growing form of digital advertising
12 Source: eMarketer August 2017. eMarketer March 2018. Because of overly restrictive government regulation, broadcast station groups remain pygmies in a land of giants What are we at Sinclair doing to stay relevant?
• Improving our broadcast news and entertainment programming • Making it available on multiple platforms (e.g., NewsOn). • Deploying ATSC 3.0 • We are finalizing deployment plans to make 3.0 available in in 20-to-30 markets at the end of this year.. • Expanding into cable • Tennis Channel • Regional Sports Networks • Expanding into digital • Earlier this year, we launched a free OTT ad-supported video streaming service called STIRR with a wide range of programming, including local news. • We are now using our local sales force to sell local ads on third-party OTT video streaming services.