From Colin Mann in Cannes
News that online ad spend is now bigger than TV is not the death knell for traditional broadcasting as many have suggested: it is an opportunity that TV should seize with both hands, according to social media agency Yomego.
Yomego's managing director, Steve Richards, argues that TV that embraces social media, rather than rails against it, is capable of converting its large and enviable audiences into highly successful 'social' communities. Setting out the critical issues that face the TV industry in a new report, 'TV: End of the industry, Or just the end of a business mode?' he says that sharp revenue declines from advertising have been in stark contrast with viewing figures, proving that content is still king.
"Standard and Poor recently estimated ITV's 2009 spot ad revenue would shrink by nearly fifteen per cent compared to 2008. Yet ITV.com is reportedly doing OK. In another example, CBS attributed a 200,000 increase in viewers in one month to the strategic placement of sample content on YouTube. The BBC is even redesigning its websites to increase their social media content," he observes.
He suggests that falling ad revenues because of the recession are merely a symptom, not the underlying cause of TV's current challenges. "The experience is that TV has the content people want but it must change its business model to incorporate the new platforms, before these new platforms replace TV altogether." Richards believes that the opportunity for TV producers is to build their own social communities around their content, adding that it that it is all about the packaging: "Content has an intrinsic value and views will subscribe to watch it, just as advertisers will pay to be associated with it. Subscription models using Facebook apps are a potential money-spinner for content owners. Users don't want to pay multiple subscriptions to access content, so multi-layered content for niche audiences just needs to find the right home. And social media channels have a rather large 'welcome' mat."
The Yomego report points out that currently an average of 20 hours of video is uploaded every minute; Facebook has 300 million users and 96 per cent of generation Y â€“ the digital generation that will outnumber the baby boomers by 2010 â€“ have joined a social network. Even legal wrangles over copyright issues are unlikely to derail the YouTube juggernaut, the report concludes.