The death of TV just five years away?

An interesting bit of biz news in from the States today, which has some relevance for this end of town. Namely that this year in the States, for the very first time, internet ad spending is set to eclipse total spending on all print media. But this has been long predicted. What is surprising is the e-marketer.com chart showing that online ad spending is set to overtake TV in the States by 2016.

The information paints a somewhat gloomy picture for the TV industry, predicting that the broadcast, cable and satellite television business – funded by expensive subscriptions and even more expensive 30-second ads – only has about five more years of primary media relevance left.

The rationale behind this is that more people are spending more time online, a perception that online ads are more measurable, and a growing comfort by advertisers in ad campaigns that integrate multiple channels, including online. Nonetheless, television will remain dominant through at least 2016.

US online advertising spending, which grew 23 percent to $32.03 billion in 2011, is expected to grow an additional 23.3 percent to $39.5 billion this year-pushing it ahead of total spending on print newspapers and magazines, according to eMarketer. Print advertising spending is expected to fall to $33.8 billion in 2012 from $36 billion in 2011.

But good news for advertising aficionados. Despite concerns about the troubled economy among agencies and marketers, total ad spending in the US is expected to rebound in 2012 after rising 3.4 percent to $158.9 billion in 2011, according to eMarketer. US total media ad spending will grow an estimated 6.7 percent to $169.48 in 2012, boosted by the national elections and summer Olympics in London. eMarketer estimates US digital newspaper ad revenues grew 8.3 percent to $3.3 billion in 2011. Print advertising revenues at newspapers fell 9.3 percent to $20.7 billion in 2011.

So again, is the death of television really nigh?  Well, let’s compare TVs with wireless phones shall we?

Percentage of U.S. households with wireless-only phone service:

  • 2004: Unmeasured
  • 2005: 7.3 percent
  • 2006: 10.5 percent
  • 2007: 13.6 percent
  • 2008: 17.5 percent
  • 2009: 22.7 percent
  • 2010: NA
  • 2011: 29.7 percent

The collapse of the telephone took just five years, according to Jim Edwards from eMarketing …

Nearly one in three houses in the States has no landline telephone. In houses that do have them, they’re often used only as the number you give businesses you suspect will generated unwanted telemarketing calls; or they’re there by default as part of a cheaper wireless bundle.

According to Edwards the TV industry has long been aware of the “cord-cutters” – people abandoning TV in favor of HuluNetflix and YouTube – for some time. The scary new demographic, according to eMarketing, is the “cord-nevers“: young people and students who have never paid for TV and don’t see a reason to start now:

“They are growing up in an Internet-based video culture in which the mantras of ‘why would I pay for TV?,’ ‘pay TV is a rip-off’ and, ‘I can find that for free on the web’ are getting louder. We fear that some of these consumers will find pay TV far less relevant to their lives than do today’s adults”

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