Advertising, viewership flowing to digital media, says researcher

The rise of broadband signifies "a game change" for broadcasters, a researcher told an opening-day audience at the Canadian Association of Broadcasters’ annual conference in Vancouver. In keeping with the conference’s theme of "New Realities, New Rules," the Sunday presentation by Stephen Armstrong, president of Stephen M. Armstrong Consulting Inc., delved into the disruptive effects emerging platforms and forms of content are having on the broadcast landscape. While many in the room had doubtless heard most of the statements about new media’s potential threat to traditional broadcasting before, Armstrong backed up his assertions with some striking statistics and projections. Armstrong cited figures projecting that 422 million people – a full 18% of the global population – will have broadband Internet connections by 2010. When such connections were tethered by wires, conventional broadcasters faced a relatively limited challenge: competing with computers for viewers in the home. With wireless broadband becoming more prevalent, however, the challenge for broadcasters and other "old media" content providers will be to "follow consumers from screen to screen throughout the day" on devices such as mobile phones, handheld PDAs and gaming systems, he said. In addition, many broadband providers have moved beyond merely providing access into packaging and delivering content in a similar fashion to broadcasters. "When the broadband market became more competitive, access providers anticipated that their market was going to shrink," Armstrong said. Hence, deals like the one Rogers Cable Communications Inc. struck in September to feature CBS Broadcasting Inc.’s Survivor: Cook Islands on broadband video on demand immediately after each new episode’s run on conventional television will become more common. As a result of innovations in wireless platforms and the rise of new forms of digital content, the long-promised "convergence culture" is finally beginning to arise, he said. Consumers are no longer content with merely having content when they want it, they also want to be able to interact and play with it. Prominent Canadian examples of this phenomenon include Québecor Media Inc.’s Canoe Live experiment, which melds online, print and broadcast properties with user-generated content, and Corus Entertainment Inc.’s Treehouse Direct digital storefront. "All of this must have some implication for traditional television ad revenues," Armstrong continued. While the extent of that implication has yet to be measured, it’s possible it’s already being felt: television advertising revenue in general is stagnant here in Canada, while ad revenue at conventional TV broadcasters is actually in a mild decline. Contrast that with the Internet advertising market, which has seen enormous and more or less undiminished growth over the past 10 years. While the broader category is still growing at double-digit rates and is predicted to continue doing so – it grew from $86 million in 2001 to $562 million in 2005 here in Canada – there are relative winners and losers. Although it accounts for less than 2.5% of the total online ad market today, advertising on online video properties is leading the pack in growth, Armstrong said. Radio hasn’t escaped unscathed either. "Radio has already seen this move, because many years ago with the introduction of the Walkman, radio began to see some competition," Armstrong noted. More recently, radio has been pressured by online streaming radio and other Internet music services – including peer-to-peer sharing of songs – as well as the advent of satellite radio. Canadian Communications Reports will have more coverage of the 2006 CAB annual conference in its November 20 issue.

Advertising, viewership flowing to digital media, says researcher

Broadcast | November 7, 2006

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