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Summary:

TV networks made $1.63 billion on web advertising last year, according to a new report on the U.S. content market by Convergence Consulting. We like any web video stats that involve the term “billions,” but let’s dig a little deeper. Web revenue amounted to 2.4 percent […]

TV networks made $1.63 billion on web advertising last year, according to a new report on the U.S. content market by Convergence Consulting. We like any web video stats that involve the term “billions,” but let’s dig a little deeper.

Web revenue amounted to 2.4 percent of total U.S. broadcast and cable TV advertising revenue, which Convergence pegged at $66 $67.6 billion. The web figure increased from $1.27 billion in 2007, and it includes both display and video advertising on everything from local news to full-episode viewing of prime-time shows.

While the web will remain a tiny slice of the market (and this is just advertising, not subscription fees), Convergence estimates online ad revenue will nearly double by 2011, to $3.23 billion, or 4.6 percent of total TV ad revenue. The growth will be driven more by increasing usage than increasing volume of ads; Convergence thinks 4 minutes per half hour is the max people will tolerate online.

On average, 15 percent of people who watch TV on a weekly basis also watched full episodes online in 2008. That number is expected to rise to 24 percent in 2011, a slight bump over last year’s prediction.

Convergence noted that syndicated views from sites like Hulu, MSN, Yahoo, and Fancast are driving up online TV viewing significantly. On average NBC saw almost 7 percent of its average weekly viewing audience tune in to its own web site for full episodes. If you include all its distribution partners, that number rises to 11 percent. CBS had a similar leap, from 4 percent of its audience watching full episodes on its own site to 7 percent of its audience watching on its own site plus partner sites.

But the growth of online TV viewing will be dampened by increasing DVR penetration, says Convergence. The firm expects half of U.S. TV subscribers to have DVRs by the end of 2011, up from 31 percent in 2008.


Further reading — our recent online video revenue posts:

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