Opportunity knocks

One might think that engineers, production staff and station management would be eager to adopt new ways of operation and the latest technology. This is not necessarily the case. How often have you heard someone, often an engineer, say, “If it ain't broke, don't fix it,” meaning, why adopt new technology when existing technology works just fine? But while change may be difficult, it often represents the path to new opportunity.

As viewers increasingly demand new ways to consume content, the broadcast industry can either provide those new channels of delivery or watch as others step in to fill that need. Let's look briefly at how some of the industry's competitors are addressing new content delivery models:

  • By 2013, online advertising will overtake newspapers as the second-largest ad-spending category. In just two years, online advertising will total about $117 billion.
  • Global advertising revenue for online is predicted to increase by almost 20 percent each year through 2016.
  • Mobile TV advertising will total $2.7 billion by 2013 and is expected to grow at a similar pace with online video.
  • In addition to new growth markets, video and TV advertising will continue to reign over all media. While online ads are growing faster, traditional TV advertising will still command a 40 percent share of all advertising dollars and increase annually by 7.5 percent through 2016.

Who will gain from these new opportunities?

Broadcasters clearly can benefit, but only if they're willing to invest in the technology required to deliver the new channels. Are there others competing to enter these new spaces?

You bet.

Online video continues to demand an increasing amount of viewer engagement time. In the last quarter of 2010, newspapers for the first time surpassed broadcasters in total minutes streamed. This interesting development proves that the “dying medium” is rapidly adopting broadcast technology and now producing more video content than TV stations.

The data shows key differences in the content produced by the two verticals, however. Broadcasters provide fewer but longer titles. Newspapers produce many more, but shorter, titles on a more regular basis. News directors must be scratching their heads.

In addition, the number of people in the United States watching online video has steadily risen over the past few years. Research firm eMarketer projects that 77 percent of Internet users in 2014 will be watching online video content at least monthly. Factors driving the consumption of longer-form video are new over-the-top (OTT) boxes and services that are now available.

Here are just some of the ways viewers can connect with streamed content:

  • Boxee, a media streaming device, provides access to more than 100 feeds, including Vudu, NHL, MLB and Flickr.
  • Roku, the $100 cord-cutting enabler, provides access to Netflix, the MLB, the NBA and Amazon.
  • Apple TV is perfect for those who religiously embrace iOS.
  • And, there are more than 200 other devices capable of accessing streaming content.

Additionally, there are the streaming networks:

  • In March 2010, 135.3 million viewers watched 12.9 billion YouTube videos, which equates to 95.6 videos per viewer.
  • Hulu was second in the number of videos according to ComScore, serving up 1.1 billion videos in March 2010.
  • Amazon's Instant Video, a $79/year service, provides access to 5000 streaming videos and TV programs.
  • Netflix, a $95/year service, delivers 61 percent of all digital video and claims access to more than 20,000 movie titles.

Finally, changing viewer demographics will affect who comes out on top. The highest penetration of online video viewing is in the 18-34 age group. Within three years, the penetration of these online viewers will exceed 90 percent. And as these viewers age, they will be quite comfortable with alternative ways to access content.

Broadcasters need to decide now if they want to answer that knock at the door.

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