Worst yet to come for Euro broadcasters

Study says ad recession, falling prices adding to woes

BRUSSELS -- For European broadcasters already struggling in a challenging advertising market, the worst is yet to come.

A report released Thursday by media analyst Screen Digest shows a TV market in a downward spiral of economic slowdown, advertising recession, deflated prices and audience fragmentation.

In the U.K., ITV is set for a 3% drop in ad revenue. French broadcaster TF1, which has seen audiences fall, is forecasting a 3% drop in full-year revenue. And Spanish broadcasters Telecinco and Antena3 have been brought down by a deep ad recession, new competitors and tight advertising rules. Only Germany and Italy have bucked the trend so far, the report says.

"It may seem paradoxical that as TV audiences are still growing, TV advertising revenues are falling," the report said. "The reason is that the demand for TV advertising is flat -- and so broadcasters have been forced to drop their prices. It is cheaper to advertise now on TV than at any point in the past 20 years."