Overall, TV viewership is dropping, and the Super Bowl is one of the few exceptions where viewers aren’t fast-forwarding through commercials with their digital video recorders (DVRs). eMarketer forecasts a negative growth of 4.2% in US television ad spending in 2009.
Concurrently, US online video ad spending is expected to grow 45% to $850 million in 2009. Video is the fastest-growing format on the Internet, making expansion from offline video into online video that much more attractive.
Broadcasters need to find a way to redefine their businesses in an increasingly digital world to take advantage of this growth. In many cases, that means a focus on expanding programming to the online realm and testing business models there. Indeed, a trend is for viewers to go online to watch ads following the Super Bowl.
The TV networks are drawn to the growth in online video ad spending because the video format plays to their programming strengths, even if they have not yet figured out exactly how to effectively monetize online video.
“As television and PC technologies converge further, the potential exists for enhanced engagement with viewers—and more advertising opportunities,” said Carol Krol, senior analyst and author of the report, “Television’s New Picture: Seismic Shifts in the Digital Age.”
“But the networks will only succeed if they can continue to demonstrate a willingness to adapt to rapid online changes, weather the recession and respond to the changing viewing habits of their audiences,” Ms. Krol said.
The TV industry needs to sort out the winning business model, whether it is primarily advertising or a hybrid of advertising and premium pricing. Until that is defined, growth will be hampered.
To speak to Ms. Krol about the convergence of traditional and digital media, reach out to the eMarketer media contact listed below.
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