22 January 2013 | Blog
A recent TVWatch column by Wayne Friedman, “Happy TV Executives Seek Halfway Digital Advertising Goal Line,” declared that old school magazines are chasing a goal of 50% of revenue coming from digital advertising, and went on to ask what this benchmark means for TV networks.
The answer is precisely nothing.
Is the TV ecosystem changing? Of course. Is it possible that TV will find itself with shrinking revenues in the future? It’s possible. Cord-cutting, second screens, and similar trends do indicate challenges looming on the horizon. But so far, these challenges have failed to appear. Cord-cutting, for all the hand-wringing it has inspired, has yet to materialize at the levels doomsayers keep predicting. Second screens have proven to, instead of decreasing TV watching, increase viewership. Most important, according to the latest Nielsen State of the Media U.S. Consumer Usage Report, individuals still dedicate nearly three quarters of all time spent with media watching TV. In contrast, time spent watching online and mobile video remains well below 10% of total time spent with media.
Meanwhile, the digital space continues to change and fluctuate as viewers (and publishers) try to figure out the best way to use Hulu and its cousins. TV networks are experimenting with digital monetization efforts, as they should, but they’re doing so responsibly; in a non-panic-stricken fashion. Would they like to increase their revenues by expanding further into the digital space? Again, of course. But the fact that the immature digital space does not present any significant challenge to the viewing volume and related revenues of the mature television space does not mean, as Friedman declares, that “media’s future still looks to be a pain in the neck.” TV’s future still looks awfully bright. And there’s no reason to jump off a ship that’s not sinking.