Here’s a widely blogged article that appeared in Sunday’s NY Times (reg. req'd) "Someone Has to Pay for TV. But Who? And How?"
Behind the article is an emerging sense of panic that is based on an “emperor has no clothes” scenario. In other words, TV is losing its mystique. There’s conflicting data that reflects TV still has the greatest reach and reported influence among media. But there’s plenty of data about people turning off TV and TV not being effective in reaching certain demographic groups (read: young males). Among other reasons, those can be cited in the networks and content producers racing to embrace broadband video to extend the reach of broadcast and cable TV, as well as to capture niche audiences.
The TV ad market in the US has been estimated at $74 billion. Meanwhile, Jupiter argues that DVRs and ad skipping could potentially cost $8 billion in 2006. It estimates that 53% of DVR owners skip commercials. Ad skipping is the primary motivation or one of the top two depending on whose research one consults – time shifting is the other – for acquiring a DVR.
In the wake of the breakdown of TV’s mass audiences, broadband video will see gains. It may also help drive continued broadband penetration (to watch video online). Putting aside “convergence,” some version of which is starting to happen, many people will indeed start watching video on their computers. Whether it’s short-form content or full length TV shows and movies remains to be seen. Ironically, often people cannot skip commercials online. (The NY Times article cites the recent Philips Electronics patent filing for devices that would prevent ad skipping and channel surfing during commercials.)
On the decline of TV, Carat Americas CEO David Verklin was quoted, in an article that appeared in AdAge in September, 2005 as saying, "A new plan is going to emerge that will be no more than 50% of spending in TV. Today it’s 66%. Forty billion dollars will shift to other media.”
Let’s assume these numbers are overblown at least in the near term. Yet even if half that shifts, it will be a huge blow to TV and a boon to other media, the Internet in particular. In the latter case, one of the main beneficiaries should be Yahoo!, which has worked hard to court brand advertising.
The challenge for marketers will be “putting Humpty Dumpty back together again.” What I mean by that is the reach they previously got from TV. It can be done online, it’s just a lot more challenging.
But crisis equals opportunity, right? Online video offers unprecedented targeting opportunities. And the Holy Grail is reach + targeting.
____
Here's an article that's sharply critical of the Jupiter data/forecast above.
