Once upon a time children woke up on Saturday mornings, came out to the only TV in the house and watched cartoons. Why? Because that’s when the cartoons were on.
Since then, television has gone crazy with specialty channels, 24 hour cartoons, 24 hours sports, 24 hour extreme salad shooting, etc. Cable companies have been able to tier packages to combine different channels and make a little money. OK, a LOT of money.
People recorded their shows on VCRs and now DVRs so they can watch them later. We began watching TV on our terms, not based on what the TV execs thought was the best timing for the program. We could just schedule a recording of the program, but that is almost becoming a bit more work than some folks want. What if all the programs were available all the time. Sort of like a 24-hour TV channel? That’s where the internet comes in.
The big networks (and some of the smaller ones too) have joined up and began placing their past shows online at sites like TV.com (http://www.tv.com) , Hulu (http://www.hulu.com), and Joost (http://www.joost.com). Here you can search for the shows and individual episodes you desire to watch. Miss that last episode of Grey’s Anatomy? No problem! Don’t have cable at all, but need to feed your Family Guy addiction? There you are. TV on the internet. As these sites grow, you will start to see more and more integration between the computer and your TV. Hulu already offers a free application (Hulu Desktop) to give you a more TV-friendly experience.
At home, you could connect HDMI or DVI from your computer to your TV or, go a little more old school with an S-Video cable from a laptop and a cable with RCA on one end and a plug for the earphone jack on the other to port sound to your TV. Put a wireless keyboard and mouse on it and set your TV input to the right source and you will be watching the internet on the original Boob tube.
iTunes is another possibility. This way you can purchase episodes for $1.99 each or season passes to your favorite series and then watch them on the go via your iPod or iPhone. This is a super simple way to watch your shows without being tethered by a cable to anything. Plus you can always hook your iPod up to your TV to watch the shows that way. Apple does sell a cord to do that.
Lastly, I give you the Slingbox. This is a nifty little contraption that hooks up in your house, connects to your existing cable, cable box and the network via Ethernet and allows you to log in and control your cable box over the internet. Watch shows, flip channels, etc. The Sling website even has some shows streaming from their site. This is the ultimate tool for a road warrior who longs to watch their familiar local news every night, or for that downtime in a hotel and you can watch shows you’ve already recorded on your cable-provider DVR.
What this all boils down to is that we now have even more options when it comes to What should we watch, honey? Hopefully this increasingly level of access to programming will mean an increasing level of quality content provided by the networks. Still all of these options may still hear the phrase uttered, There’s nothing on!, but hopefully it will be uttered less often.
Hulu has been a hot topic in media news for over a year now, and it has been traded with increasing frequency over the last few months. It’s hard to believe that it’s only become the third largest online video source in recent months. Hulu is one of those websites that seems like it’s always been around to provide content. In March, Hulu’s tally of 380 million online streamed videos beat out Yahoo, who hosts only a paltry 350 million. According to ComScore, Hulu’s next rival is Fox’s interactive media, which boasts over 437 million videos. It’s not going to catch up to Youtube any time soon, however. The household name in online videos streamed 5.9 BILLION videos in March alone. This truly puts the online video sharing sites into perspective.
Youtube’s user generated content may be great for sharing viral videos, but it’s size doesn’t really stack up when it comes to ad revenue. Hulu, despite being only a fraction of the size of Youtube, is expected to bring in over half of the ad dollars that Youtube expects. That’s 120 million for Hulu, and only 200 million for Youtube, which is highly disproportionate.
The correlation between desirable content and ad revenue generated is the reason that Disney has discreetly bought up 30% of Hulu for a sum that has not been publicly named. Disney currently operates through its ABC portal, but an alliance with Hulu will give the company a far broader audience base. Hulu also benefits quite a bit in this arrangement, as it will now have free access to popular primetime shows like “Lost” and “Desperate Housewives.” Disney shares the board with NBC and Universal, and holds three seats.
This model of video aggregation is proving to be even more valid, considering that this is the first big Media buy in recent memory. Questions remain, however, as to whether Hulu can continue to expand at the current rate from a user standpoint.
Hulu’s recent success may be due to a series of popular commercials starring celebrities such as Alec Baldwin, in which Hulu execs are supposedly aliens. These moderately amusing commercials have heightened awareness of the site, and Disney’s new marketing dollars can only help increase brand awareness.
With Hulu arising as a legitimate market share of TV audiences, it is interesting to see how competing news and TV agencies will keep up. As broadcasting agencies fight to remain relevant in the internet boom, how they develop their online presence and partnerships will be critical.
Some sites are resisting the pull of Hulu. For example, CBS, which uses its own portal TV.com. Apple is also resisting free online videos, in favor of paid rather than ad based models. Youtube has shown that its content does not guarantee ad dollars, so it will also be interesting to see how it copes with a lack of access to prime-time shows.
As bleak as the economy appears…as deep as the stock market falls…its encouraging to hear there’s one arena that continues to thrive, even during recessionary times. If there is one industry that does not need to go to Congress with hat-in-hand, its online advertising!
Internet advertising revenues in the U.S. remain strong, topping $23 billion, according to the recent 2008 Internet Advertising Revenue Report, released by the IAB and PricewaterhouseCoopers LLP. Despite a failing economy in the US, interactive advertising’s continued growth confirms the recognition of the medium’s dominance over other traditional forms of advertising. The old adage of “fishing where the fishies swim” is clearly the dynamic at work here, in reaching consumers online where they are spending more and more of their time.
By year’s end, 2008 tallied a record $23.4 billion, exceeding 2007′s previous record performance of $21.2 billion! This is the fifth consecutive year of record results. By comparison, a variety of sources demonstrated weakness in overall advertising spending that includes the traditional “push” advertising mediums of TV and print. The Nielsen Company reported that overall U.S. advertising for the full year was down 2.6% compared to the full year 2007.
The Report also indicated that revenue from online ads ¢â‚¬â€ which companies such as Google and Yahoo heavily rely on ¢â‚¬â€ totaled $6.1 billion in the last three months of 2008.
Going forward, a report was released by senior analyst David Hallerman on the the future of online advertising. He says that while paid search will continue to be the biggest growth sector in 2009, the appeal of ‘search’ is limited, in that it’s basically a direct marketing tool. He says that video is much more emotional and creative and has a greater ability to engage the online consumer with a ‘call to action’ message.
As far as how video revenue will break down in ’09, Screen Digest analyst Arash Amel believes Hulu will take in $120 million this year and tells Business Week it will match YouTube’s revenue for the first time by year’s end.
However, while the online space continues to look healthy, other analysts are more cautious in predicting the future. While they see the IAB report as encouraging, they are not totally sold. The good news is that Internet advertising revenues in the U.S. are still growing…the bad news: this growth appears to be flattening.
“My opinion is that the report gives a high-level snapshot of what is happening — but to get the true story, you have to dig deeper,” Anand Subramanian, CEO of ContextWeb and the operator of the ad exchange Adsdaq, told the E-Commerce Times.
“If you look specifically at growth for targeted advertising versus run of network or run of site, it’s a different picture. What we’re seeing is that targeted advertising, be it contextual or behavioral or geographical is actually going up,” Subramanian said, “and untargeted buys, like run of network [or] run of site, are coming down. This blended effect is what’s reflected in the IAB report.”
So stay tuned…because in my opinion the sure bet is still in favor of online advertising continuing to rise into the foreseeable future.