Thursday, April 22, 2010

The Great Video Migration

2009 Ad Spending
$ Billions
It seems all eyes in the media industry are on the data illustrated in this chart. And for good reason. Over the next few years billions of dollars in TV ad spending will start migrating from TV to online, following the viewers to their preferred viewing platforms. Much of the spending will stay with the big media companies (who generate the lion's share of television content) as they carefully craft online commercial ad strategies and new subscription models.

An Ad Age columnist a few weeks ago described in detail how addressability and interactivity (leading to greater consumer engagement) could enable television content owners to actually make more ad revenue from online video than traditional television.

But online video is still in it's infancy and the spending shown in the chart above is pretty much aligned with actual viewing.  As I pointed our in a blog post last year, 98% of video consumption is still happening on traditional television. Looking at it another way, the average American watches nearly 160 hours per month of TV and just over 3 hours of Internet video.

We all just think we are watching a lot more video online because we are snacking throughout the day, watching lots of short clips that don't really add up to a lot of time, and leaving the longer sessions for the television.  This is going to change quickly as we start connecting our TVs to the the web in mass.  As I pointed out on this blog a few months ago, 24% of US homes have a tv-web-connection.  And a recent study from consumer electronics site Retrevo (as reported in Mashable) shows that people under 25 watch a quarter of all their TV shows online. 

The broadcast networks are carefully and impressively preparing for the inevitable.  I recently sat through a one-minute pre-roll ad on on where I was catching a Brian Williams news segment. I was given the opportunity to watch shorter ads, but with more frequency.  The one-minute ad was well targeted, reasonably entertaining and presented in a clean interface.  I didn't mind at all.  It seemed worth the price to watch a piece of content exactly when and where I wanted to see it.

And even after every minute of television programming finds it way online, we will continue snacking (our "crisis of attention" as Steve Rubel call it, is permanent) forcing TV programmers to repackage and distribute their longer form content in new ways, yet also provide big opportunities for smaller, niche-oriented content producers and emerging video ad networks and exchanges.

Thursday, April 8, 2010

The Real Impact of the iPad

I just spent an hour touring the iPad with my friend Evan, who is the CTO and Chief Digital Strategist at a big media and entertainment company. He is and always has been an Apple evangelist and his initial review of the iPad falls clearly on Walt Mossberg’s (glowing, "game changing") side of what has been a very partisan stream of reviews.

While I haven't spent enough time with the iPad to provide a review, nor will I ever be qualified to make a prediction on it's future success, there seems to be no doubt that just the introduction of this device is having a massive impact on the advertising and media distribution businesses. And that is what Evan and I chatted about after the tour.

Practically every significant brand in the world dedicated more resources to their mobile media strategy in advance of the launch of the iPad. And those that didn't, jumped in this week, feeling the pressure of a big race starting without them. The rich, multi-media interface of the iPad signals enormous potential opportunities for brands to connect with their customers like never before.

How to execute on this opportunity is the big question being asked in thousands of offices this week. Should brands dedicate resources to build an App and be held hostage to Apple's arbitrary approval approval process and over-crowded App Store or should they focus on developing a smart, mobile-friendly web site that can detect on the fly the best delivery format?

Meanwhile, magazines and newspapers see a whole new set of opportunities to break free of print's production, distribution and presentation restraints. Time Magazine's App is pretty stunning, providing the iconic magazine a completely new digital identity. But the same efficiencies and ease of market entry are available to all.

As Evan said, "the competition is now everyone."