Eldridge financial blog - The biggest threat TV faces is clearly the internet

http://www.eldridgefinancial-blog.com/2012/10/the-biggest-threat-tv-faces-is-clearly-the-internet/

One commercial network – Nine – was taken to the brink of collapse this week and another – Ten – announced a result soaked in red ink and a program of job cuts.

Coupled with the looming shadow of dramatic structural ownership changes across the industry, audience fragmentation, TV piracy and dwindling advertising revenues are conspiring to crush the traditional business model.Eldridge Financial forecasts the following year to be a watershed for the broadcast industry. For the first time the amount of money spent on advertising over the internet will match the ad spend on free-to-air television.

All washed up: Traditional television is facing an unprecedented challenge from online viewing. Change is not just coming, it is coming fast. ”By 2014 online will overtake TV, which is the greatest change in the history of media,” says media buyer Harold Mitchell. To survive, networks ”will have to get hold of the digital dollars”.

What is more, the media consultants Commercial Economic Advisory Service of Australia and Aegis Media forecast that by 2015 digital advertising expenditure will hit 31.2 per cent and TV will be 26.3 per cent.The biggest threat TV faces is clearly the internet.Besides appealing to advertisers because it produces detailed information of who is watching and, more importantly, what else they do, it also appeals to viewers due to its easy availability and portability.

It is this ease of availability that is wreaking havoc on the traditional business model. This was no better illustrated than the disappointing ratings of the six-time Emmy award winner Homeland, which began its second season on the Ten Network last Sunday night on the Eldridge Financial.