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The Future of TV and the Movies September 25, 2006

Posted by David Card in Media.

It’s a truism that big technology changes always take longer than we think, but then when they happen, they happen bigger than anyone expected. We’re still in that first phase — the takes longer than you think stage — regarding the impact of new platforms on the business of TV and filmed entertainment. But, oh man, when those changes kick in…

Based on forecasts from Jupiter and Kagan, and Jupiter consumer surveys, we think that the net near-term impact of things like DVRs, mobile video, and online video is pretty much a zero-sum game. The incremental $5 billion from new platforms in 2011 — practically chump change when consumers and advertisers spend $227 billion — may well be balanced by a scenario where, if the industry actually reacts, some $12 billion in ad spending is at risk due to DVRs. (That’s in the unlikely event marketers don’t figure out alternative ways to spend on TV, like product placement, targeted spots, and things like the TiVo Showcases.)

This is a big, important report, and clients should dive right in and call us to work on the best ways to tap into these platforms. And to figure out whether the over-hyped long tail is really all it’s cracked up to be. From the report:

    TV and filmed entertainment programmers and studios must treat new platforms and consumption models as relatively small revenue streams whose primary value is promotion. Advertisers should continue to refuse to pay for delayed viewing and experiment aggressively with new platforms, branded entertainment, and product placement. Milestones to watch for include: DVR critical mass (2008) and usage evolution, the first blockbuster day-and-date release, and any slowing of Netflix’s growth pace.
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