For the past 60 years, television has been one of the dominating forces in the lives of Americans. For generations, it served as the most popular access point for news, information, and entertainment. And as such, advertisers could always rely on TV ads as a way to reach just about any demographic besides the Amish.
The internet has slowly eroded the primacy of television as an advertising medium by becoming a faster and more responsive portal for news and information. Now, the internet is starting to seriously challenge TV on video entertainment. This article will look at some recent developments in this area, including the newest research, to answer the question: Has internet video killed the television star?
With faster mobile internet speeds and devices with larger screens, more consumers are watching videos and TV shows online with their smartphones and tablets. According to some estimates, 84 percent of internet users worldwide watch videos online. One reason for the popularity of online video is the reduced amount of time spent watching advertisements. Ads account for 23.2 percent of time spent watching TV in the US, compared to just 5.4 percent for online video.
If one company can be blamed for the current talk of the demise of TV, it’s Netflix. Netflix already decimated the video rental market with streaming movies and seasons of old TV shows. Now the company is making award-winning series such as Orange is the New Black and House of Cards. These are popular shows where advertisers can’t reach the audience with traditional video ads. Even movie theaters have reasons to be wary as the sequel to Crouching Tiger Hidden Dragon will be released on Netflix instead of in theaters.
Besides threatening traditional media outlets with new content, Netflix is quickly becoming the entertainment method of choice for families. Recently, comScore reported that nearly half of households with three or more people subscribe to Netflix.
Online video affects the viewing habits of young adults the most. More than half of millennials watch TV shows on a tablet, desktop computer, or smartphone. The comScore report also found that 17 percent of millennials watch no original TV series on traditional TV sets. And that Americans aged 18-34 are 77 percent more likely than average to live in households that have never had pay TV.
This isn’t just the work of Netflix. A lot of American consumers watch videos and clips on Facebook and YouTube. The comScore study found that in August of 2014, nearly 23 billion videos were viewed on Facebook and Google sites (including YouTube). There are other sites, like Hulu, which also air TV show. Sites like these (and DVR devices) are the reason why more than a third of Americans watch TV programs at a different time than when they originally aired. This also reduces the effectiveness of traditional TV video ads.
So, has internet video killed the television star? The short answer is no, not yet, though the stars of TV do shine a little less brightly. The comScore study had one stat that made it clear internet video has a long way to go before it dethrones TV. On average, Americans spend a total of 48.2 billion hours watching TV per month, compared to just 1.9 billion for online video. Internet video will grow in importance and marketers should adjust their budgets accordingly. However, it’s likely there will always be some form of television programming and that business owners will be able to reliably find large numbers of their target demographic watching these programs on the air.
Ironically, it’s little like the song that was the basis for this article’s title. Back in 1979, The Buggles had a hit with the song “Video Killed the Radio Star”, which was about the eventual demise of radio. However, here we are 35 years later, and radio (and its stars) are still around. So even as internet video grows in importance, marketers will still need to keep some skin in the game of television advertising. But to ignore the growing audience of internet video is to put a marketing or advertising campaign at a great disadvantage.
For more information, read this article with seven reasons marketers should consider online video ads