Television executives are beginning to see the handwriting on the wall, and it’s spelled W-E-B.
While their print counterparts have been watching the Internet eat their lunch for some years now, the network poobahs are just now realizing that they’re half a ham sandwich short themselves. “After years of siphoning ad dollars from newspapers and magazines, the Internet is starting to chip away at the biggest and most powerful medium of all: television,” write Chris Gaither and Meg James in today’s Los Angeles Times.
The Internet has become another dark cloud on the horizon, threatening to shrink the $60-billion-a-year market for broadcast network, cable and local TV ads. Online ad revenue surged 33 percent to $9.6 billion in the United States last year and is expected to grow as much this year.
Some oblivious broadcast officials — as did print execs not so long ago — “discount the threat,” write Gaither and James.
Broadcast networks reach more than 98 percent of the estimated 110 million homes with TV sets in the United States, and marketers say most online ads can’t stir up consumers’ emotions like the traditional 30-second spot.
“The future is coming quickly, but it’s not here yet,” said Jon Nesvig, ad sales president for Fox Broadcasting Co. “You need mass communication to let people know what’s out there.”
(Does this whistling past the graveyard sound familiar?)
Although the networks may be latecomers to the Internet-as-competition game, they can’t count on their hapless brethren in print media who park their cars in the executive lot to offer any reliable roadmap on how to respond. The dead-tree folks haven’t figured it out themselves. In fact, they’re going in remarkably different directions all at once, hoping to find something — anything — that generates online revenue.
Consider the recent decisions by the New York Times and the Los Angeles Times about online access to their content. On Monday, the New York Times announced it would begin charging for some online articles, including op-ed and news columnists. On the west coast, the Los Angeles Times has taken an opposite tack, removing the subscription restrictions on its popular weekend Calendar section, in hopes that new online ad revenue will surpass the subscription revenue it is giving up.
In other words, no one has a clue; these guys and dolls are all throwing darts. In the dark. And blindfolded.
And if more proof of the bipolar reaction is needed, consider CNN.com’s announcement Monday that it will begin to offer its existing online news videos for free starting June 20 — while also preparing a new more elaborate video package that it will charge for. (Note to TV execs: The sharp jump in ad revenue on the videos, as well as decreased production costs, will allow CNN to offer the freebie. For now.)
Meantime, recent research shows that people are already spending slightly more time in front of their computer monitors than in front of their TV screens, according to Gaither and James. So shouldn’t broadcast executives be scared witless about the voracious Web eating into their already-declining shares of both audience and ad dollars? Nahhh. Just ask the folks at the San Jose Mercury News, which on Monday joined a veritable platoon of newspapers reporting a hair-raising decline in circulation for the most recent reporting period.
–Susan Q. Stranahan
Susan Q. Stranahan wrote for CJR.