July 07, 2007

Look where the money is going.

"Talk of TV's short-term demise is premature," says Ben Macklin, eMarketer Senior Analyst and the author of the new report, US TV Trends: The Impact of DVRs, VOD and the Web. "Yet it is equally shortsighted to think that the traditional TV model will not change significantly over the next decade."

Contrary to the views of some analysts and commentators, data available today currently do not support the view that increased use of the Internet, digital video recorders (DVRs) and video-on-demand (VOD) has stalled the growth of television advertising spending or revenues in the United States to date.

In fact, data from Nielsen Monitor-Plus and TNS Media Intelligence show positive TV advertising spending growth during 2006.

Robert Coen of Universal McCann concurs. By his calculations, driven by higher prices rather than greater volume, advertising revenues for the big four broadcast TV networks grew during 2006.

And the same for cable TV networks.

"Nevertheless, by 2011, data will show that increasing use of the Web, DVRs and VOD will affect the traditional television advertising model," says Mr. Macklin.

By 2011, eMarketer estimates there will be more than 200 million broadband Internet users in the US, 92% of whom will regularly watch video online.

At that time the broadband audience will be two-thirds the size of the total US TV audience, up from less than half the TV audience in 2006. In addition, 45.1% of TV households will have DVRs and nearly 59% will have VOD capabilities — both of which are used to avoid advertising.

"TV advertising dollars will inevitably shift to alternative channels," says Mr. Macklin. "Online advertising is likely to be the major beneficiary of this redistribution."

eMarketer's most recent online advertising spending estimates show that by 2011, $44 billion will be spent on online advertising, up from $16.9 billion in 2006, and 10% of all online advertising will be spent on online video advertising.

Courtesy of http://www.emarketer.com

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