Internet TV Dominated by the Big Networks
TV Streams from the big American TV networks of ABC, CBS, NBC and Fox and including Hulu dominate the internet TV sector in the US. So says a new report from UK research firm Screen Digest.
The report reveals that that online advertising supported TV is a big money maker, generating $448 million during 2008 and is set to rise to over $1.45 billion by the year 2013.
The major video site YouTube will struggle in the future due to having no affiliation with any of the major rights owners and therefore unable to show premium content. MAjor networks and the Hollywood film studios are expected to continue to limit deals with third party sites and choose to build their own syndicated advertising supported internet tv and video services, like Crackle, developed by Sony Pictures, and the CBS Audience Network.
This will mean that non affiliated video sites will have to either create their own unique and original programming or stick to showing user generated videos.
“With better targeting and increased ad inventory, online TV services could be generating per-viewer revenues comparable to an average TV broadcast viewing in as little as three years,” said Arash Amel, author of the report. “However, based on the current online ad strategies implemented, it will account for 2.2 percent of all US TV advertising revenue by 2013, but definitely won’t be generating enough to offset the US$ 2bn we expect total US TV advertising to have declined by during in that period.”
“The challenge right now is to maximise the ad-supported online video business model, see how new forms of short form and traditional long form content can drive growth, and explore more advanced methods of video advertising while there are still revenues from the traditional business to support the transition to multiplatform,” added Mr. Amel. “In this regard, the next few years will be critical.”
The report goes on to say that free internet TV will challenge the paid model of content download services such as Apple’s iTunes, as well as pay per view and subscription models, which will require innovation in order to remain competitive. However, Screen Digest forecasts that the paid market, driven by the respective hardware ecosystems of the leading service providers, and high value sports events, will continue to grow by 67% to reach $1.33 billion in revenue by 2013.
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