The online TV services of the four major U.S. networks, ABC, CBS, NBC and Fox, along with Hulu, accounted for a combined 53 percent of the ad-supported online TV market that generated $448 million in revenues in 2008, according to a new report by Screen Digest.
The remaining share of revenues was made up of the online video services of major sports leagues, video services from traditional online portals, and direct services from other major channel groups and content owners.
The combined dominance of the leading broadcaster supported platforms will drive the total ad-supported model for the distribution of online entertainment programming, news, sports and events in the U.S. to more than $1.45 billion in revenues by 2013.
“With better targeting and increased ad inventory, online TV services could be generating per-viewer revenues comparable to an average TV broadcast viewing in as little as three years,” said Arash Amel, Research Director, Digital Media, Screen Digest and author of the report.
However, based on the current online ad strategies implemented, it will account for 2.2 percent of all US TV advertising revenue by 2013, but definitely won’t be generating enough to offset the $2bn we expect total US TV advertising to have declined by during in that period.
The major U.S. broadcasters are evolving into a multi-platform TV distribution networks in an attempt to mirror their traditional channels business online. The multi-platform approach has been and will remain important to the future relevance of broadcasters to younger demographics and retaining prime position in the online TV space.
The key will be to create an online platform model that allows for control of the content while distributing it widely, and meets the audience’s changing demands for TV anytime.
“A successful online entertainment distribution business model is about establishing and maintaining interest in trusted brands and syndicated services that go hand-in-hand with the content, often free at the point of audience consumption, said Amel.
