As web and TV continue to converge, new media start-ups like Blip.tv (“the next generation television network”) are driving traditional broadcast and cable executives nuts. Why? Partly because new distribution channels are now available for free to anyone with a video camera and a computer. But largely because the power that once was centralized is now in the hands of “viewers.”
Consider what this means for television channels supported (for now) by advertising:
According to TNS Media Intelligence, television advertising totaled $64 billion in 2007, or 32 percent of the total spent by U.S. advertisers. Internet advertising, while the fastest growing, still accounted for only 8 percent or $11 billion. Tom Rogers â€™76, CEO of TiVo, believes that the $64 billion of advertising on traditional television is about to hit a brick wall, thanks to the digital video recorder technology (DVR) marketed by his company and others. Today, the 25 million households in America with a DVR can skip ads. While the majority of homes still do not have a DVR, the market is approaching a tipping point. â€œMost analysts expect that number to go to 50 million within the next two to three years,â€ Rogers says. â€œAt that point twoâ€“thirds, or more, of the American homes that advertisers care most about will be avoiding their commercials.â€
The National Geographic Channel (U.S.), which launched in 2001, has become a valuable part of the Society’s media portfolio, even though NGS holds a minority stake. (Rupert Murdoch’s News Corp is the Channel’s majority owner.) But if Tom Rogers is right, then what happens to our Society when that tipping point is reached, and the Channel’s business model â€” cash for eyeballs â€” “hit[s] a brick wall”?
Tim Kelly? Are you out there? We’d love to hear your thoughts in the comments, below.