Q+A “TELEVISION’S FUNDAMENTALS ARE HEALTHY: ALL-TIME HIGH, STABLE LEVELS OF VIEWING; GROWING CAPACITY TO MEASURE AND MONETIZE TIME- SHIFTED VIEWING; HIGH PRODUCTION QUALITY IN MOST GENRES; WELL- ESTABLISHED IMPACT ON BRAND BUILDING; WELL-ESTABLISHED TOOLS THAT PROVE THE ROI OF TV ADS FOR CONSUMER GOODS.” 38 MEDIA MAGAZINE Spring 2012 ing for the average individual — a mark that is stable by the way. That’s a lot, but it would be a mistake to think Netflix streaming comes entirely at the expense of traditional live linear TV viewing. Some of it replaces DVD watching, some of it DVR replay. More fundamentally, Netflix is only a substitution for library content and scripted genres drama, sitcoms, movies, kids programs; as long as networks are able to attract the best talent and release the most attractive new shows every season, they will remain at the center of family entertainment. And despite the efforts of some over-the-top players to launch original production like Netflix’s Lilyhammer, it will take many years for them to create a talent ecosystem. Besides, live unscripted programming sports, reality TVis more popular than ever and remains a stronghold for traditional TV viewing. As for Hulu, that’s a catch-up destination and broadcasters control the platform, so it’s not likely to grow beyond what its sponsors think is maximizing the total ad revenues of a given show. Finally, native online short video content, e.g., YouTube, are mostly “snacking” and not really competing for primetime TV viewing. Fundamentally online or mobile video consumption is mostly incremental — sometimes simultaneous — to television in terms of viewing patterns. Overall, in the foreseeable future, we believe Over-the-Top-TV is more likely to impact the multiple system operator business than the free, ad-funded TV business. Netflix’s Lilyhammer That is through cord-cutting: new house- stars Steven Van holds not subscribing to cable or satellite Zandt as a New TV and relying on OTT and over-the-air York transplant to Norway broadcast TV instead, for either budget constraints, lack of interest or change in consumption patterns. We forecast 10.5 million households will become OTT/OTA households by 2016. Should TV networks be prepared for a drop in ad spending with the proliferation of digital? When will TV ad spending give way to online TV ad spending? Overall, digital media do compete with television for advertisers’ budgets but, at the same time, television is still stealing market share from other traditional media like newspapers, magazines and radio. We believe the outcome is neutral or slightly positive for TV’s market share in the next few years. In 2016, we expect it to have a 36 percent share. Television’s fundamentals are healthy: all-time high, stable levels of viewing; growing capacity to measure and monetize time-shifted viewing; high production quality in most genres; well-established impact on brand building; well-established tools that prove the ROI of TV ads for consumer goods. That compares with a print sector that is losing readers and advertisers year-after-year. Categories that have been loyal to print for many years — for example, retail — do switch to digital and TV. New planning tools from Nielsen or ComScore are allowing advertisers to buy online video with the same familiar concepts and reporting currencies, so multi-platform, multi-device TV distribution will increase. But TV broadcasters do control premium content and will continue to capture most of the ad revenues generated on those platforms — for instance, by bundling live broadcast and other audiences in their commercial offering. By 2016, MAGNA anticipates traditional TV to generate $73 billion in ad revenues against $4.2 billion of online video advertising. lilyhammer photo: netflix
Buying at the Speed of Light THE MARKET FOR REAL-TIME BUYING IS MOVING AS FAST AS, WELL, A TARGETED AD IN AN RTB SYSTEM. SPENDING ON RTB-BASED DISPLAY ADS COULD EXCEED $2 BILLION THIS YEAR; AND BY 2015, ONE IN FOUR ADS PLACED ON THE INTERNET COULD BE DRIVEN BY MACHINES MAKING NANO-SECOND DECISIONS. OFFICIAL CONFERENCE: INTERNET WEEK NEW YORK MAY 16, 2012 THE WESTIN NEW YORK AT TIMES SQUARE www.mediapost.com/ommartb
Change language