While viewers are switching to online video, ad revenues are not
The Internet represents a valuable complementary distribution platform for television broadcasters and cable networks, but it is not a viable replacement, according to Convergence Consulting Group.
Convergence estimates that in 2007, US online TV advertising revenues accounted for 2% of total US broadcast and cable network TV advertising revenues, or $1.4 billion. By 2011, that figure will rise to $6.4 billion and represent 8% of TV advertising revenues.
In 2007, 9% of TV viewers also watched full-length TV episodes online. By 2010, Convergence estimates 23% percent of viewers will do so.
During that time period, DVR ownership is also expected to rise dramatically, from 25% of TV viewers in 2007 to 48% in 2010, thus limiting the potential viewership of online TV episodes.
Given the option of watching programs on TV and skipping ads or watching online with ads, Convergence predicts the majority of consumers will choose the former.
Convergence Consulting Group Via eMarketer