Report

November 2002

Will Ad-Skipping Kill Television?

Josh Bernoff 		Five years from now, the shift to on-demand TV will cut traditional ad-viewing by 19%. This will shave $7 billion from traditional TV ad revenues, but advertising and fees from video on-demand will more than compensate.

MARKET OVERVIEW
  • Half of TV viewers will have PVRs or VOD by 2007.
  • 28% of TV won't be viewed on the networks' schedule.
  • Three out of four marketers will cut TV ad spending.
ANALYSIS
  • VOD content will arrive with a syndication model.
  • Ad-skipping won't kill TV -- VOD ads will help make up the 10% decline in ad revenue.
  • Consumers will pay $6 billion for on-demand TV content.
WHAT IT MEANS
  • HDTV creates see-it-now urgency for programs and ads.
 
Figures & Data
  • Figure 1.  Consumers Want On-Demand TV Features
  • Figure 2.  Forecast: US On-Demand TV Households, 2002 To 2007
  • Figure 3.  Forecast: US On-Demand TV Viewing, 2002 To 2007
  • Figure 4.  PVR Users' Ad-Viewing Varies By Program
  • Figure 5.  National Advertisers Will Shift Spending Because Of Ad-Skipping
  • Figure 6.  Basic VOD Players
  • Figure 7.  Forecast: US Television Advertising Revenues, 2002 To 2007
  • Figure 8.  Forecast: US Television Consumer Revenues, 2002 To 2007
   
RELATED MATERIAL 
  • Online Resources
  • Survey Methodology
  • Companies Interviewed For This Report
  • Related Research
 
GRAPEVINE
  • Counting VOD subscribers isn't as easy as it looks.
  • Whither TiVo?
  • Ad agencies compete on new TV smarts.

 

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