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Summary:

The hints have been dropped before, but next week expect to hear it loud and clear: The big U.S. television networks no longer fear the Web, but are embracing it as closely as they can, no longer worried whether digital dispersion will dilute their traditional broadcasting […]

The hints have been dropped before, but next week expect to hear it loud and clear: The big U.S. television networks no longer fear the Web, but are embracing it as closely as they can, no longer worried whether digital dispersion will dilute their traditional broadcasting efforts.

The only question right now is who will drop more Web buzzword bingo words, either Disney’s Robert Iger or CBS’s Les Moonves, in their dueling keynote speeches at next week’s Consumer Electronics Show in Vegas, which should (along with MacWorld’s expected iTV news) serve as the point-in-time when networks showed they really loved the Web.

The big lesson the networks have apparently learned is that Web offerings do not cannibalize traditional primetime viewership, but actually enhance or increase it. While such an idea may not be so surprising to those of us used to turning online for information and entertainment, it is a huge admission for the networks to realize — publicly — that their predictable money-minting industry is now next in line for Internet disruption. And after watching what happened to the music industry, TV execs know the outcome of resisting the ‘Net.

What changed networks’ minds? Most likely the confluence of several factors, including a big increase in online advertising spending; successful baby steps of digital offerings, including Disney’s deal with Apple’s iTunes; and the widespread popularity of pro-content clips illegally shared on sites like YouTube, or pirated over BitTorrent.

The big push to start running had to be Google’s $1.6 billion purchase of YouTube, a move that put more fear into standing still than in moving too quickly online. Wall Street’s growing acceptance of big networks’ plans, which have all been pointing lately to more digital offerings, is just another sign that the power structure is now comfortable that there is money to be made online, and not just by Silicon Valley VCs.

The not-so-secret secret that it has taken TV so long to understand is that for all its popularity, there are more people who don’t regularly watch TV than those who do. A lot of them work for a living, have kids, or have recreational pursuits that keep them in the dark about big TV’s primetime shows. With an entire Internet to distract them, they’ve been moving away from the traditional shows and discovering new stuff elsewhere. But as YouTube showed, there’s still a lot of desire to watch pro content, especially in shorter doses or just whenever we feel like it, not just between 6 and 10 p.m.

So you would expect that a place called NewTeeVee can only join the gigglers when we read a CBS press release today about some home-baked “research” that claims to unearth the stunning fact that “The More Connected the Public Becomes, the More Television They Watch.” The money quote, from Big-Eye Chief Research Officer David F. Poltrack:

These findings really demonstrate the potential the broadcast networks have to further engage the public with our content as new technology expands our distribution options.

So.. you mean if more people have more chances to learn about and watch your programs, you might get more viewers, not less? Shazam! We next await Mr. F. Poltrack’s findings on color vs. black and white.

In the meantime, the move of big money online should be fun to watch, especially as it teams up with phone companies to help disrupt another cozy cash-cow setup called the cable industry. In the middle will be more money from players like Cisco, Motorola and Intel, who are looking at TV as their next growth business. Like Apple to IBM, let us be the first to tell the networks: Welcome. Seriously.

  1. Re: “The More Connected the Public Becomes, the More Television They Watch.”

    CBS has a business model to protect – the study was most likely intended to rebut the ad agencies’ studies, which have found (not surprisingly) that many consumers are spending more time online than in front of their televisions. CBS probably hopes to improve its bargaining position vs the ad agencies and to keep more advertising spend with TV.

    It’s just another front in the PR wars, and nobody (w/ the possible exception of the White House) turns PR into “news” faster than the advertising and entertainment industries. :-)

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  2. […] CBS tipped its hat that CES would be all about the Internet with its dubious research report from last week; it may not announce anything new, since it already has a deal showing clips on YouTube and has played virtually in Second Life. Too bad there’s no Webcast! Topic: Online Video, Networks Tags: CBS, YouTube, Slingbox, Second Life, Jennifer Beals, CSI […]

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  3. […] At the same time, online video revenue is expected to grow to $900 million by 2010 from $200 million in 2006. User-generated video, mostly supported by advertising, is expected to account for just 15 percent of this revenue. That’s a pretty conservative estimate, but it makes sense given the increasing availability of professional content online. […]

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