Online Video Is Sucking The Blood Of Mainstream TV

Dec 12th, 2007 | By | Category: Internet TV, Streaming Video, Video

NBC logoWe spend a lot of time looking at the big trends shaping Internet media at Podcasting News, and one of the most important ones is that people’s attention is moving to the Web faster than traditional media companies. As a result of this shift, mainstream broadcasters are losing their audience to things like YouTube and video podcasts.

There’s a real cost to this, and recent news from NBC highlights the fact that Internet video is starting to hit mainstream broadcasters in the pocketbook in a big way.

NBC is failing to deliver advertisers the audiences that they have been promised and is having to give them back their ad dollars as a result:

NBC has quietly begun reimbursing advertisers an average of $500,000 each for failing to reach guaranteed ratings levels, the first time a network has taken such a step in years, media buyers said.

Networks usually offer make-goods — free advertising slots — in the event of such shortfalls. But NBC has none to give. In fact, no broadcast network has much ad inventory left between now and year’s end — except for, perhaps, a handful of units the week between Christmas and New Year’s, and that doesn’t do much for advertisers chasing holiday shoppers.

CBS, ABC and Fox also are doling out make-goods, primarily for the first quarter. They have blamed softness on a new ratings formula, but media agencies disagree. None of the networks would comment.

NBC and others have been timid to explore the idea of free, ad-supported internet video, and have put preserving DVD revenues over building a the next-generation revenue platform. It’s already evident that this isn’t a viable long-term strategy.

NBC and other mainstream broadcasters need to move their attention to free Internet video, because their audience already has.

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