New Media vs. Old Media: Clash of the Titans

The Internets have been like that monster in “Cloverfield,” destroying old media like newspapers, radio and the music industry casually and remorselessly. And now, according to the Wall Street Journal, Google and YouTube are preparing to do the same thing to Television:

“Americans watched more than 300 million videos on Google's YouTube in December alone, and the amount of time spent watching video online grew 34% last year.

“While that's not been entirely at the expense of television viewing, the growth sends shivers down network executives' backs. Worse, Google's new plans to wring advertising revenue out of online video could eventually cause broadcasters a lot of pain. …

“If Google succeeds in marrying advertising to online video, broadcasters could find themselves in a bind similar to newspaper publishers. The latter suffer from declining circulation, higher production costs than their digital brethren and advertisers that are switching to cheaper, more effective online distribution.

“Broadcasters already face variants of the first two problems. Google's initiative might complete the trifecta. The cost of reaching a thousand viewers online is about one-fifth the average cost of doing so via a major broadcaster. And the fact that users click on ads that interest them means a campaign's efficacy can be measured more accurately.

“The roughly $80 billion annual market for television advertising has held up remarkably well over the past several years. It might now be in for a big challenge.”

This might be a little hyperbolic: After all, I don’t think anyone’s really figured out how to marry advertising and content when it comes to short films. A five-second spot before a parody news item on the Onion News Network scarcely makes an impression, while sitting through a 30-second spot before a 90-second or two-minute news story at ABC.com or CNN.com is worse than watching regular TV and is just irritating enough to make you think twice about watching anything else on their sites.

Meanwhile, ABC’s been working on a little pushback against the encroaching menace of TiVo and other DVRs: They’re preparing, through local cable companies, an On-Demand service offering the network’s shows free and with limited commercial interruption – but with the fast-forward option on DVRs disabled, which means you’ll have to sit through a few commercials.

ABC has been successfully testing this new service in Orange County, where it found that 93% of those using fast-forwarding disabled VOD considered the advertising acceptable in exchange for gaining free access to the shows. 20% of the users went with On Demand rather than their DVRs, and ABC also found that 27% of those surveyed said they wouldn’t have watched the shows at all without the convenience and ubiquitous availability of On Demand programming.

So ABC’s not only reaching out to casual viewers but getting them to sit through commercials, to boot. So maybe they don’t have as much to fear from YouTube – well, yet – as the Wall Street Journal seems to suggest.