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When you talk about reach, there is perhaps no better platform than television to speak to the broadest and most diverse audiences. But as the digital revolution presses on, the broadcast industry is facing disruption, too, as advertising dollars are chasing Millennials, who consume content across devices such as TV, laptops, smartphones and tablets.

Those cord-cutting Millennials are looking less to traditional TV and opting for over-the-top services like the Netflixes, Amazons, Hulus and YouTubes of the world. The shift has disrupted the industry, pushing cable companies to offer skinny bundles, which are comprised of less expensive subscription bundles comprised of fewer channels.

Moody’s vice president and senior credit officer Jason Cuomo said that OTT service providers want broadcasters in their bundles, and that the bigger challenge for those broadcasters is figuring out how to capitalize on digital ad growth.

Stripping out the print ad market, which is negative, Group M said in 2016 digital captured 72 cents of every new ad dollar, and TV nabbed 21 cents. The research firm said in 2017, that ratio becomes 77 cents to 17 cents, but noted that TV’s ad share of total advertising spend is “largely stable at 42 percent in 2016 and 41 percent in 2017.” Digital media’s share of ad spend is projected to hit 33 percent this year, up from 30.7 percent in 2016.

Although Moody’s Cuomo characterized the broadcast TV industry outlook as “stable,” he noted that broadcasters have to decide if they are going to take a chance and make a go at the digital world or continue to focus on TV.

If the firms choose the former, they are faced with either trying to grow a digital brand from scratch or acquiring a digital company — both options are difficult as the business model is not endemic to a cable company.

Univision tried its hand at both, first making a stab at developing Fusion Media, a homegrown digital media brand targeting ethnically diverse Millennials. The company gave up trying to grow Fusion after about four years of funneling millions into the digital experiment, which turned into a venture that accrued tens of millions of dollars in losses each year. At the end of 2016, Univision let go of about 250 employees, including most of Fusion’s staff and soon after, it acquired the former Gawker Media sites, which include Gizmodo, Jezebel and Deadspin, for $135 million. Those digital properties — known as Gizmodo Media Group — along with a few others, now make up Univision’s digital division.

“Economically, it is not profitable for them,” Cuomo said of Univision’s Gizmodo acquisition. “Investing in digital is to learn. They are trying to understand the marketplace. A lot of it is experimentation. A lot of it is a commoditized business, web site optimization, placement of ads, a lot of it is not innovative. I think the most benefit they are getting right now is learning.”

The desire to capture digital learnings will likely drive more consolidation, too, as unprofitable digital companies look for buyers and broadcasters with more money to burn than their publishing counterparts look for relatively cheap and easy ways to get into digital.

The analyst said that cable companies have to weigh the risk of investing in digital companies, many of which are money-losing endeavors, or whether to play it safe and look to mergers within their universe in order to build scale.

“The digital side is their biggest challenge,” Cuomo said of broadcasters. “A lot of them are scratching their heads as ad share is moving to digital.”

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