December 6th, 2008
Nearly a year ago, I posted Tivo Shifting Ad Spending that included this quote: “Forrester Research forecasts that when 30 million homes in the US have PVRs, 76 percent of advertisers will cut their TV ad spending, a quarter of them by more than 40 percent”.
David Goetzl cites this Nielsen research data in his Media Daily News post and estimates DVR penetration to be “25% of U.S. homes–up 5% from nine months ago”.
We are approaching this tipping point for the broadcast television advertising industry just as it must deal with contracting ad spending as a result of the overall economic decline and the specific decline of spending by the US automobile industry.
Next February’s digital TV conversion will drive more consumers to adopt cable and satellite systems that are now bundled with DVRs.
This leads Cory Bergman of Lost Remote to ask “Is cable the future of network TV?” The broadcast networks may decline to being only “general entertainment cable networks” and their relationships with the local TV stations may change dramatically. Local stations may need to find programming elsewhere and other ways to generate revenue.
I see this as an opportunity for content creators to develop programming that can be distributed via the web generally as marketers shift their ad spending online and to partner with the local TV stations for distribution on their websites specifically. Some of this content may become part of the local TV station broadcasts that will also be carried on cable as part of their “must carry” arrangement.
This puts this content into the living rooms of general consumers alongside the “hit programs” of the dying broadcast television networks. However, the regional relevancy and the local targeting may attract the direct investment of marketers who are trying hard to deliver buyers to local automobile dealers.
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