Traditional Video Still Almost 100 Times More Popular Than Online Video

While newspaper struggles are far from over, television appears poised for a turnaround next year.  And this morning, a new sign that television will still be be a force in the marketplace for years to come.

According to the recent Magna Online Video Forecast, online video will continue to grow 36% this year. However, traditional video is still almost 100 times more popular than online video.

The Center for Media Research reports few large advertisers can achieve broad reaching objectives solely by using an online video-only campaign if there are any content preferences involved.

As a point of reference, during 2008 490 billion person-hours of traditional television were consumed according to Nielsen. This equates to 244 times more consumption of professional content video than of online video. Even assuming last year’s growth rate continues through 2012, traditional TV would still account for 98 times more consumption.

2012 Traditional TV “Popularity” Vs. Online Video (Scenarios Assuming 4-Year Compounded Growth Rate of Online Video)
Growth Rate of Online Video Assumption Relative Consumption of Professional Content Video (times as much)
10%

158.5X

15

132.7

20

111.9

24

98.0

25

95.1

30

81.3

35

69.9

Source: MAGNA. 2008 Growth Rate from Accustream, April 2009

Over the next few years, says the report:

  • TV content, and traditional TV suppliers, will continue to account for the bulk of online video budgets, but as user-generated content sites increasingly supply professional content to their mass audiences, these sites will produce faster rates of growth.
  • Ad networks will continue to serve a valuable niche to the ecosystem, aggregating otherwise unsold (or undersold) inventory in an efficient manner, with cost-effective ways to reach large audiences
  • Traditional print publishers will continue to hold valuable inventory, but few will produce significant volumes of content to capture much market share
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2 thoughts on “Traditional Video Still Almost 100 Times More Popular Than Online Video

  1. Similar projections were done for newspapers.
    Mobile Video (whether Mobile TV Broadcast, 3G/WIFI Streaming etc…) is going to take off in 2010. Then Local TV Stations will have a difficult time because they have not been able to put the right monetization schemes to profit from their mobile and web channels.

    Take Lin TV as an example. Look at their latest financial PR.

    http://www.lintv.com/investor/images/pdfs/quarterly_reports/Q1_2009_Earnings%20Release%20FINAL.pdf

    Net revenues decreased 20% to $74.5 million, compared to $93.1 million in the first quarter of 2008.
    • Digital revenues, which include Internet advertising revenues and retransmission consent fees,
    increased 82% to $8.9 million, compared to $4.9 million in the first quarter of 2008.

    Digital is still very small. Advertising of TV will go down, and digital revenues are not picking up fast enough. What can be done?

  2. I do not contest the results of the study at all. Indeed, most content watched on TV is of the type ‘whatever is on air’. But the use of “Profesional Content” for “Traditional Broadcast” as opposed to “online” is symptomatic of all traditional industries (including newspaper).

    In addition, the conclusion that “traditional TV would still account for 98 times more consumption” is moot : Yes, people will still look at TV more than at downloaded content. Yes, they will still look at “live” events and premium content.

    But that’s not the point at all. If their TV is connected on the Internet and on a Tivo+++, I guarantee most of TV watching habits will differ from the “good old couch potato” you apparently expect.

    The only things that are sure are indeed :

    – online is growing, and is making it to the TV set
    – traditional is decreasing, and will go further down
    – total revenue of both will be less than current
    – as for so many industries, there will be more “amateur” content, of usually lower quality, that will somewhat compete for (and distract some of) the same ad money.

    This means less jobs, and the need to do more with less money.

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