Real Estate Meltdown
August 25, 2006 5:29 PM
Well now we know. The so-called “soft landing” for ebbing residential real estate transactions is not soft at all. It’s in major free fall. And that economic indicator has major ramifications for every sector of the country’s economy, including the selling and buying of TV ad time.
Why? Home sales have been the chief catalyst of economic growth in this country for the past three years. When people don’t buy homes, they don’t buy a lot of consumer goods either. And they don’t go out. I’m starting to read and hear a lot about the country maybe already being in a recession.
Oddly enough, sometimes a recession is a good time for the TV biz. That’s because families tighten the belt and cut a lot of discretionary spending. They are eating at home a lot more and not going out to the movies. That’s good and bad for TV, especially cable. Logic argues that nobody is gonna shut off the cable. They’re stuck at home. And history shows they don’t, in fact, cut off cable service.
But ad sales? That's another story. Ad sales could be affected as studios and fast food companies know it’s going to become more difficult to lure people out of their homes. Sounds like the country is on its way to another cocoon period. So how do we grapple with this? Your thoughts?