Why the web is emerging as a champion, not an enemy, of tv

It’s a question that’s been around for at least 12 years, since the commercial internet took off. The technology evangelists believe interactivity is so compelling that everyone will want to take part, the sceptics think television is the most powerful entertainment (and advertising) medium ever discovered. And somewhere in between are those who claim that no new medium has ever replaced another, conveniently forgetting the people who used to deliver telegrams.

Recently the argument has been getting another airing, this time in The Guardian, in an article published last week by Tess Alps, chief executive of Thinkbox, the organisation formed to promote TV advertising. Alps was replying to an earlier piece which claimed that the amount of time spent online is growing at the expense of the amount spent watching TV.

According to Thinkbox figures, TV is doing well, with time spent viewing holding steady across both the broad audience and, perhaps more surprisingly, in the youth segment.

But if the headline viewing figures look encouraging, the advertising data tells a rather different story. Years of fragmentation of the medium have spread its audience ever more thinly, to the point where major advertisers look elsewhere for the mass reach that TV used to provide.

If, however, TV economics are based on being able to sell ad spots at certain rates and those rates are no longer applicable, then something’s got to give. While there will always be an ad market around blockbusters, and while there will always be formats that are so cheap that almost any advertising will keep them afloat, everything in the middle is being squeezed.

According to US Internet Advertising Bureau figures, the online advertising market in the US is now worth a third of the TV advertising market. If advertisers continue to switch their money from TV into online, some industry watchers are speculating that everything between major sporting events and camcorder shows could collapse, leaving us with no new programming to fill the gaps in the schedules.

Incidentally, this helps explain the seemingly endless flood of programmes that aspire to the condition of sport; that require you to watch them in real time, so as to be part of the watercooler conversations the next day. There’s no point in watching that three-day-old football match you videoed, because you know the result and the discussion in the office or pub will have moved on by then. Similarly, there’s no point in watching three-day-old I’m A Celebrity… Get Me Out Of Here!, because it’s been overtaken by events.

The internet’s role in all this is manifold. Even with the fragmentation of audiences that followed the massive explosion in the number of available channels in the 1990s, it’s doubtful whether the advertising crunch would have happened had there not been a compelling alternative channel through which brands could reach consumers.

But other ramifications are much less clear. For example, part of the explanation for TV viewing time holding up, particularly among young people, may be the fact that they’ve got the TV on while they’re online. At the same time, increased broadband penetration has brought online video into the majority of homes, and one of the things that capability is being used for is watching TV. The early days were dominated by user-generated content, illegal downloads and 30-second TV spots. But this year we’re seeing the roll-out of IPTV, television delivered over the internet.

Its first manifestations are the video-on-demand offerings launched by the BBC, ITV and Channel 4, and pure-play internet channels such as Joost and Babelgum. Take-up of all these services has been slower than expected, as has the use of personal video recorders such as Sky Plus, but analysts are predicting dramatic growth as they become easier to use, because the over-riding trend in media consumption is towards content on demand.

Meanwhile, at the Ad:Tech interactive marketing show in New York earlier this month, there was a great deal of talk about a move away from user-generated content and back to professionally produced content.

Combine these two ideas and a new ad model starts to emerge. Video-on-demand is far more amenable to tracking and analysis than broadcast, opening up the possibility of using the sort of behavioural targeting currently the subject of experimentation by online publishers. That could change the nature of TV advertising dramatically, to one where relevance is the watchword.

So what you think about the future of TV looks increasingly like a matter of definitions. If you define TV as the traditional ad-funded broadcast model, there’s little doubt that it faces an uncertain future. But if you think of TV as professionally produced video content delivered to consumers at the time they choose through the platform they choose, then a very different future awaits. And the internet might turn out to be the saviour of television, rather than its nemesis. 

Michael Nutley is editor-in-chief of New Media Age