Rupert Murdoch has decided to accelerate his digital strategy, and today, you sort of understand why.
Anywhere you look, the offline media business is eroding and changing, and quickly. When VC Josh Kopelman kept talking about investing in companies that shrunk markets, I won’t lie, I did not immediately “get it.” Don’t get me wrong, I fully understand Skype’s modus operandi etc., and the havoc they wreaked on telco’s business. But I’ve always sought to enlarge the pie, not make it bigger.
In the past, I had asked if online media will ever really be incremental, or whether new media makes things so effective, that new media companies can “shrink” the total online and offline ad market and grow their businesses online.
Increasingly, I think that it’s the latter. Don’t get me wrong, with new consumers pulling up a chair to tables in China, India, South America and consumer’s incomes growing in America too, I do see total advertising dollars growing too, but I do think that a major part of ad spending will be online, or determined online. This is why MSFT spent $6B - or a 85% premium - on aQuantive, because not only will online get a large share of the ad pie, but offline spending will be allocated and determined online, too. It’s just more efficient to do so. In the 1990s, decision making and the creative ad process moved from typewriters, pens and pads to the desktop, in the 21st century, it will evolve to a workflow and canvas on the Web.
All to say, today I read a story via Marc Andreessen’s blog, that will send shivers down the spine of TV execs: 2.5M TV viewers evaporated.
In TV’s worst spring in recent memory, an alarming number of Americans drifted away from television the past two months: More than 2.5 million fewer people were watching ABC, CBS, NBC and Fox than at the same time last year, statistics show.
Everyone has a theory to explain the plummeting ratings: early Daylight Savings Time, more reruns, bad shows, more shows being recorded or downloaded or streamed.
Scariest of all for the networks, however, is the idea that many people are now making their own television schedules. The industry isn’t fully equipped to keep track of them, and as a result the networks are scrambling to hold on to the nearly $8.8 billion they collected during last spring’s ad-buying season.
“This may be the spring where we see a radical shift in the way the culture thinks of watching TV,” said Sarah Bunting, co-founder of the Web site Television Without Pity.
I doubt all of those viewers died. Not all are online, but many are. Others are outdoors. Some are on wireless devices. This is why I’m putting such a premium on moving our massive library of broadband video content from the Web alone to wireless devices and out of home digital networks.
Who knows, maybe online ads will surpass TV ads by 2021.
I think that around the World, the are not enough Rupert Murdoch’s who see the writing on the wall, everything will be digital: this can be an enormous opportunity or a massive threat to media companies. You better understand the angst and envy of TV executives.
Last night I was in a Blockbuster, I thought I had stepped into a time zone.
Today I was in a bookstore: all I saw was inefficiency. I was looking around at people like they were aliens. Why would they come into a physical store looking for books. Why not scan by title, keywords, author, and then read reviews? Obviously Amazon.com’s Jeff Bezos wondered this, too, back in the 1990s. But the revolution has just begun.
Text is the tip if the iceberg. Video is an enormous untapped industry. Broadband is not there yet, but when it will, I cannot see the landscape being what it is now. Some companies, sadly, will be left behind. There’s way too much analog content, way too much legacy revenue streams at stake for them to overnight give it up.
It’s not too late embrace it, but time is certainly not on old media’s side given the importance of acting quick and remaining agile.
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June 23rd, 2007 at 4:29 pm
I had the exact same feeling when I was in a bookstore last week. I’ve been writing about updating and expanding the form of books for a year now, but it still hit me — perhaps because I hadn’t been in a bookstore for so long.