Wayne Friedman, Media Post writer, thinks the entire media industry is less dependent on advertising - and will continue to be so. Instead, media owners can expect to grab more money than ever from consumers' pockets.
Those TV and video content owners, who are proposing new fee-base consumer business, just sat up and took some notice.
"What's really stark is that advertising, which not so long ago was the biggest part of the overall pie, is now the smallest part of the pie and is shrinking at a pretty good clip," said James P. Rutherfurd, executive vice president and managing director of Veronis Suhler Stevenson.
Veronis Suhler says consumers are paying more for entertainment stuff, including books, online, mobile media, and pay-TV like cable television's premium channels, and video on demand. It also includes the big DVD industry, which has tailed off after years of rocketing growth, and box office ticket revenues, which grew around 2% in 2008, and is expected to grow more than 8% this year.
This doesn't mean media owners are only getting money directly from consumers. News of this gives credence to all those media owners charging consumers, as well as subjecting them to advertising messages as well. Wall Street Journal's online business - wsj.com - does this, still a major success among those new digital businesses.
All this still may seem counter-intuitive. But the fix is in. Consumers are hooked to entertainment like some small stature big home-run baseball players are hooked on steroids. The cable industry has cautiously put some flags in the ground that the free ride is over for some consumers - those who view content online from cable programmers but don't have a cable subscription.
Cable operators want those people to pay. And, according to estimates like Veronis, that looks like the right approach. If that's not enough to convince you, Veronis also says the media industry is poised to be the third-fastest growing sector of the economy in the next five years.
Where is that money coming from? Look in your wallet.
Thursday, August 20, 2009
Consumers, Not Advertisers, Paying For Entertainment
Wayne Friedman, Media Post writer, thinks the entire media industry is less dependent on advertising - and will continue to be so. Instead, media owners can expect to grab more money than ever from consumers' pockets.
Those TV and video content owners, who are proposing new fee-base consumer business, just sat up and took some notice.
"What's really stark is that advertising, which not so long ago was the biggest part of the overall pie, is now the smallest part of the pie and is shrinking at a pretty good clip," said James P. Rutherfurd, executive vice president and managing director of Veronis Suhler Stevenson.
Veronis Suhler says consumers are paying more for entertainment stuff, including books, online, mobile media, and pay-TV like cable television's premium channels, and video on demand. It also includes the big DVD industry, which has tailed off after years of rocketing growth, and box office ticket revenues, which grew around 2% in 2008, and is expected to grow more than 8% this year.
This doesn't mean media owners are only getting money directly from consumers. News of this gives credence to all those media owners charging consumers, as well as subjecting them to advertising messages as well. Wall Street Journal's online business - wsj.com - does this, still a major success among those new digital businesses.
All this still may seem counter-intuitive. But the fix is in. Consumers are hooked to entertainment like some small stature big home-run baseball players are hooked on steroids. The cable industry has cautiously put some flags in the ground that the free ride is over for some consumers - those who view content online from cable programmers but don't have a cable subscription.
Cable operators want those people to pay. And, according to estimates like Veronis, that looks like the right approach. If that's not enough to convince you, Veronis also says the media industry is poised to be the third-fastest growing sector of the economy in the next five years.
Where is that money coming from? Look in your wallet.
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