Stairwellblog

Between Hulu, DVD, DVR, and the Internet, the TV affiliates are way past getting nervous about lost ad revenue. The recent news regarding one of the industry leaders, Tivo, will probably not help their near-panic. Early this week Tivo announced the development of their new set-top box. Set-top boxes have become the rage amongst tech savvy people in recent years. Essentially they are small computers made specifically for watching content on your TV that is made for the Internet. With a set-top box you can watch Netflix instant content right on your TV or you can watch streaming TV through the web and pause or fast forward as you see fit. Tivo’s new gadget still allows you to record live TV to watch later too. The point is that Tivo has made avoiding commercials and TV ads as easy as buying the Internet, something over 1/3 of consumers already do. Digital Video Recording is already available in 55 percent of TV watching households, with that number going up at an alarming rate. Major changes to TV revenue could come in the next 2-3 years. So is TV ad revenue going to be another casualty of the Internet the same way newspapers and magazines are?

As I said in a previous column, Pepsi decided to forgo buying a Superbowl TV spot and instead put their money in Internet advertising. If other companies follow them, major TV events could lose some ad revenue. Some of the networks who rely on the NFL, Major League Baseball, the Oscars, and other events could find themselves in the red very quickly over the next few years if they keep spending billions for these events. In turn the major sports franchises could also suffer if people start ignoring their commercials and product placements. This affects virtually all forms of advertising and if Tivo continues to grow the way it has, everyone will have to rethink how they spend their advertising dollars.

The question remains, who benefits from this major swing in agency spending? As companies find new ways to get their brand in front of your eyes, companies like Hulu, FunnyorDie.com, and Youtube are going to reap the benefits. Companies like Sketchers, Miracle Whip, and dozens of others have begun massive YouTube marketing campaigns, and others are sponsoring videos on Funnyordie. (Sketchers ad has gotten some media attention for its YouTube ad) The advent of web based television and 24/7 connectivity has allowed this market to flourish very quickly. The days of these sites popping up with no business model and shutting down before the business cards arrived could soon be in the past. As it stands Hulu, Netflix, and other web content distributors are operating on a razor thin margin. Just today Hulu could be facing problems from Comedy Central pulling content, and Netflix is facing studios wanting a piece of its meager profits. If they can last a little longer they could see their market stabilize, and that alone could draw in some more ad dollars from the companies that where leery of putting money into an unstable market. It all starts with a tiny box on top of your TV.

http://mediadecoder.blogs.nytimes.com/2010/01/10/winter-olympics-likely-a-tv-money-loser/

http://www.pcworld.com/article/190644/tivos_new_settop_box_unites_tv_Internet_programming

http://www.pcworld.com/article/190644/tivos_new_settop_box_unites_tv_Internet_programming

Last 5 posts by joshuasinason

• Twitter Offering Regional Targeted Ads and Becoming The Place For Social Media Marketing in 2012 - January 20th, 2012
• Social Media Aspects That Failed in 2011 But Could Explode In 2012 - January 3rd, 2012
• The State of Streaming Video in 2012 - December 21st, 2011
• Gearing Social Media To Sports Fans - December 9th, 2011
• Take A Lesson From The Muppets: Kermit The Frog and Social Media - November 22nd, 2011