There was supposedly some good news for troubled broadcasters out of the Reuters Media Summit in New York late this week when a report from consultancy Bain & Co claimed that for the next four years, time spent watching television will rise faster than leisure time spent on the Internet.
Good news for major broadcasters on both sides of the pond as in the UK ITV continues to struggle for ratings while in the US CBS is skating on very thin ice if the US does fall into an economic recession. CBS alone generates 70 per cent of its revenue from advertising.
The saviour for broadcasters, according to the Bain & Co report is the growth of video-on demand and digital video recorders. In principal, this assertion seems to make sense, but ad-skipping on digitally recorded shows and a departure from linear TV scheduling is having a profound impact on ad sales. This is evidenced by the fact that TV networks such as CBS have inflated the costs of advertising during major live events – the only time seemingly the audience is as captive as it was a decade ago. The cost of a 30-second ad at Super Bowl XLI last February exceeded $2.5m for a 30-second slot and the Arizona showdown in 2008 is already on course to blow that out of the water.
The challenge for broadcasters has to be to look at how on-demand can work as a stronger proposition, rather than continue to resist it. IPTV services, such as the UK’s Tiscali TV and BT Vision theoretically could provide much more sophisticated and targeted advertising opportunities, the broadcasters and media buying agencies simply need to start working together more effectively.
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