Following The Money To Online Video

Broadband video is having an impact on bottom lines — not as big a dent as some would like to believe given that the numbers at major media companies aren’t enough of a percentage of revenue to break out in most cases. Still, during the upfronts this week, broadcast will feel the pinch as some ad dollars move online although cable will be the greater beneficiary of ad buy changes. It’s a favorite hook for stories this week:
Business Week takes it seriously with an article headlined “Mad Ave Is Starry-Eyed Over Net Video” but is dismissive of “fuzzy” video quality and “iffy” sound — and realistic about the actual amount of money being spent in relative terms. “It’s a mere blip in the ad market. Projected annual spending of just $198 million would finance barely a day and a half of ads on TV — a $48 billion business.” But major marketers are looking for ways to tap in with short films, highlights, video ads. Broadcast nets are doing their own video tie-ins.
BW picks up another number that’s striking: an Arbitron/Edison Media Research report that as many as 20 million online viewers click on video every week, nearly matching the number who watch American Idol on Fox. The difference is the targeting and the time-shifting — pick the right places for online ads and a marketer can hit a higher percentage of the target audience than with the mass effort.
Diane Mermigas pulls apart first-quarter earnings and finds “a stark division between business sectors that still heavily rely on old-fashioned advertising sales and those who are developing new, tech-driven revenue streams.” So what if broadcast ad dollars grow this year in number? It’s the pie that’s growing. Meanwhile, she finds no evidenfce in the earnings that broadcasters companies are doing “are doing anything to save themselves by trying to leverage their unique local advertiser, community and consumer connections in a digital broadband world.” She also finds little evidence that media and entertainment companies mining for gold with digital content.
Her report is worth the effort, as always, but my own experience suggests that one of the major reasons what’s being done isn’t visible in earnings reports is because the focus is usually on the largest numbers and these kind of efforts too often are folded into other segments. There’s a lot more activity than can be seen in the 10Qs.

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