Nope, the TV Business Isn’t Dead Yet. Far From It, Really
OVER THE PAST few years, media analysts have bemoaned the End of TV. Some have wondered, as ratings tumble year after year, why would advertisers continue to buy ads? Meanwhile, Facebook and Google’s ad businesses have exploded, even though marketers aren’t spending drastically more than they have in the past. But the traditional TV industry is not dead just yet.
This month, CBS, 21st Century Fox, and Time Warner all reported advertising revenue growth. CNN and Fox acknowledged they’ve seen higher ratings (and ad revenue) thanks in part to the election. And, sure, CBS had the Super Bowl this year. Even so, the company says its ad revenue is “the strongest we’ve seen in a long, long time.”
“Hulu, Roku, Apple TV. Is that television? No, it’s not. It’s consumed on a big screen potentially in you living room, but we consider anything delivered by an IP device is not linear TV,” says David Cohen, the president of Magna Global in North America, a major ad-buyer that works with companies like Coca-Cola and Johnson & Johnson.
In other words, networks are getting advertisers’ money both ways, which for the moment seems to have led to an overall bump. But Cohen predicts marketers will begin to see more of the distinction blur. “In the short term, I think it’s not outlandish to think that a billion dollars will come out of the linear television market this year and move to digital video.”
And yet that doesn’t mean that the future for broadcasters and cable networks is ultimately secure. Analysts with eMarketer estimate that more money will be spent on digital advertising than TV by next year. Ad buyers and marketers are frustrated with the fact that TV ads continue to increase in cost even as ratings, for the most part, continue to fall. “Why as marketers have we agreed to pay more for that decline in audience is exactly the question,” Cohen says. Magna, for its part, said last week that it was moving $250 million from its TV budget to YouTube.