Our friend Liz Gannes at NewTeeVee, has a story today filled with juicy numbers on the size of the current web advertising market for TV networks. It’s tiny now, but growing fast. Still, it’ll be quite a while before web viewing saves your favorite show on the bubble.
TV networks made $1.63 billion on web advertising last year, according to a new report on the U.S. content market by Convergence Consulting. We like any web video stats that involve the term “billions,” but let’s dig a little deeper.
Web revenue amounted to 2.4 percent of total U.S. broadcast and cable TV advertising revenue, which Convergence pegged at $66 $67.6 billion. The web figure increased from $1.27 billion in 2007, and it includes both display and video advertising on everything from local news to full-episode viewing of prime-time shows.
read the rest, including projections for the future at NewTeeVee .
“On average, 15 percent of people who watch TV on a weekly basis also watched full episodes online in 2008. That number is expected to rise to 24 percent in 2011, a slight bump over last year’s prediction.”
That figure seems significant, even though the article also says that more DVR penetration may dampen the effect.
I think the question is going to be how fast does the computer-TV technology convergence compare with the speed of enhanced cable services. If most people get an all-in-one appliance from cable, then computer-TV convergence will be slowed, if not stopped. But if devices come out making it as easy to use your computer with your existing TV devices as a cable appliance, then it won’t.
This probably will also be related to how much cable penetrates the overall broadband market. If most people get their Internet from cable rather than DSL or satellite or wireless (if WiMax ever takes off), then the cable companies have the edge in controlling computer-TV convergence.
“Convergence thinks 4 minutes per half hour is the max people will tolerate online.” I just don’t get why they believe there is such a difference between online viewing and standard broadcast/cable viewing, do they provide any reason ?
From the report linked to by NewTeevee.
“By the end of 2011, we forecast 50% of US TV subscribers will
have a DVR, up from 31% at year-end 2008. Given the option of
watching TV and skipping ads, and watching online video with
ads we believe the majority of consumers will choose TV and
the DVR. Bottom line the DVR will limit full-episode viewing
(as will to a lesser extent free Cable/Telco TV VOD).”
Don’t completely get the logic behind this either, as long as the online viewing is on-demand with good quality and limited advertising I’m thinking that there is a real possibility that the online viewing will compete successfully with DVR.
If on the other hand the advertising online is increased to parity with broadcast/cable then using a DVR might become an option again.
Based on my own experiences the online VOD leaves the DVR in the dust.
NN, I don’t really agree with that so much either — especially with people under 35, which is a lucrative advertising market already, and will become increasingly so. BTW, I started to answer your other question with a comment, but just wound up doing a completely separate post:
http://tvbythenumbers.com/2009/04/07/digital-pennies-and-dimes-soon-to-be-digital-half-dollars/16089