The short version

Michael Nathanson predicted on January 1, 2023: “I predict a negative performance for the entire year, marking the first time the advertising economy will experience a downturn in a non-recessionary period. We think linear… is going to decline at about a negative six percent rate and the offset there is, look, if you have an AVOD or an SVOD ad…

Prediction by

Michael Nathanson

On January 1, 2023

“I predict a negative performance for the entire year, marking the first time the advertising economy will experience a downturn in a non-recessionary period. We think linear… is going to decline at about a negative six percent rate and the offset there is, look, if you have an AVOD or an SVOD ad tier to your product you’ll be able to reclaim some of those lost dollars. We think the digital ad tiers of these companies will have about 20 [percent] CAGR, but just because linear is so large, that six percent decline in linear will mean the overall revenue base for these companies in advertising will be negative, and that’ll be the first time in a non-recessionary year that you see negative growth.”

Follow-up

Multiple industry reports later characterized 2023 as a very soft ad year, with flat to slightly negative nominal growth in several major markets despite the absence of an official recession, validating the direction of Nathanson’s forecast. Linear TV ad revenues did decline mid-single digits or worse, while ad-supported streaming and digital video saw healthy double-digit gains, closely matching his structural call: shrinking legacy linear, partially offset but not fully replaced by growth in AVOD/SVOD ad tiers. His specific framing—“first time in a non-recessionary year that you see negative growth”—is directionally supported by how unusual 2023 looked relative to past non-recession years.

From the High Caliber AI network — see the AI for PR module in the course.