The future of TV
How is digital changing the future of TV and can TV help shape the future of digital?
For all the excitement about our digital future, the importance of traditional TV is not necessarily in decline. While online is becoming increasingly influential, the channel and programme brands that broadcast to our aerials are likely to remain a significant part of the entertainment that arrives via our internet connections.
The residual power of TV was demonstrated in 2010 when, as the green shoots of recovery appeared in the global economy, the advertising industry - particularly in Europe, but also in the US - was buoyed by a rebound of advertising revenues that was much stronger than anyone had expected.
In the UK, ITV reported advertising revenue growth of 16% (and 12% in Q1 2011), while in France, the positive results of TF1 and M6 prompted analysts to raise forecast advertising revenue growth in 2011 to 3-5%. Elsewhere, following a promising 2010, the Spanish TV market is expected to grow by 3-5% in 2011. Outside of Europe, at the 2010 CCTV Prime-time Auction, often seen as a leading indicator of growth prospects in the Chinese advertising industry, the value of total auctioned resources exceed RMB12.7 billion, an increase of 15.52% over 2009.
True, the financial crisis had forced broadcasters to be more flexible about costs in order to survive, but in the majority of cases, these cuts had been introduced without compromising audience share. This performance tells us that demand for traditional TV is still high and should remain an important component in the advertising mix.
Moreover, despite the seemingly unlimited opportunities that online content brings, for the time being at least, viewing habits are still influenced by a broadcaster's brand power. The experience of RTl demonstrates that if a show migrates to a different channel, it will typically suffer a decline in audience share of at least 15-20%. This suggests that the 'pulling power' of the station - the 'channel brand' - is also an important factor.
But while TV should still be regarded as an extremely powerful medium, there is still much to do. Advertisers need a revised measurement or trading system that can take into account digital viewing alongside traditional TV-based viewing. Some niche programmes attract the majority of their viewers from catch-up TV platforms, but with no way of accurately combining the direct response advertising of online channels with traditional brand advertising, this value can be missed.
Taking this a step further would be a universal measurement system, a move that would make global or regional advertising deals more likely. At present, each country works differently, functioning in multi-local markets.
In short, the most successful broadcasters of the future will surely be the ones that diversify and embrace digital media. Websites such as YouTube should not be feared or seen as competition; instead, these kinds of channels can function as important crosspromotion and talent-sourcing platforms.
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