Internet eating up TV viewership

The Internet portal Yahoo! recently hired one of the world's best known war correspondents, Kevin Sites, to report solo from every 'hot zone' in the world over the coming years. The American cameraman became famous for filming the shooting by a US soldier of an apparently unarmed civilian in a Falluja mosque. This move by Yahoo! is seen as an attempt to widen its horizons and challenge traditional media companies.

In a speech to the American Society of Newspaper Editors on April 13, 2005, Rupert Murdoch, chairman and chief executive, News Corporation, said, "Scarcely a day goes by without some claim that new technologies are fast writing newsprint's obituary. Yet, as an industry, many of us have been remarkably, unaccountably complacent. Certainly, I didn't do as much as I should have after all the excitement of the late 1990s. I suspect many of you in this room did the same, quietly hoping that this thing called the digital revolution would just limp along."

Last week, Murdoch had gathered his top editors for two days of discussions on what he has described as the company's highest priority: how to grapple with the threat and opportunity of the internet to the media empire he has spent a lifetime building. On the agenda was how to turn News Corp's web properties into a hub for entertainment-related content. The strategy can be viewed as an attempt to create a one-stop shop for all those looking for computer games, movies, music or chat online.

News Corp owns a clutch of media assets - including The Times, Sun, New York Post, Twentieth Century Fox and Fox Broadcasting - that are the envy of his peers. Now, Murdoch wants replicate his success in cyberspace.

In July, the company formed an internet unit, Fox Interactive Media, run by a former executive, Ross Levinsohn, to oversee its website interests. Days later, the firm agreed to pay $580 mn for Intermix Media, a company with more than 30 websites led by, the fifth most popular site on the internet. Then, last week, News Corp reached a $650 mn deal to buy IGN Entertainment, which runs sites such as for video game fans. It also bought, which owns about 200 niche sports websites. Murdoch has said publicly that the company is in talks to acquire a search engine, thought to be Blinkx.

Murdoch has often been regarded as a giant in the world of media. He is one among those who could foresee the future media. So, does his enthusiasm for cyber media indicate that the future of media belongs to the internet?

Statistics on advertising moolah strongly supports Murdoch's obsession with the internet. Advertising revenue is rapidly migrating online. Jupiter Research recently forecast that the online advertising market would reach $18.9 bn by 2010, compared with $9.3 bn at the end of 2004, at the expense of traditional media.

Television's share of global advertising spending is expected to slip by 2007 as more money is diverted to internet. Television's share is expected to peak in 2006 at 37.9 per cent of global ad spending, before slipping to 37.8 per cent by 2007, according to ZenithOptimedia. Newspapers are expected to end 2005 with a 29.8 per cent global ad spend share, and see their market share fall to 29.3 per cent in 2007. Internet's share of ad spending is projected to be about 3.8 per cent in 2005 and rise to 4.4 per cent by 2007. Net ad spending on the internet grew 21 per cent in 2004.

It is estimated that in 2005, there are 26 mn internet users in India, largely in the age group of 20-40. India's advertising industry generates about $2.2 bn annually, according to industry sources. Currently, online advertising comprises less than 1 per cent of the pie.

The total spending for 2004-2005 was about $18 mn, but the Indian Online Association (IOA), predicts this will touch $34 mn in the next financial year and will cross $57 mn in 2006-2007. Print and television still hog a major share of Indian advertising at $700 mn- $920 mn annually.

The many advantages of the medium include the fact that it is a two-way communication. Unlike print and TV, the consumer can decide when and how he wants to be exposed to a campaign, and the advertiser too can zero in on targets more specifically. Internet combines the audio-visual effect of the TV and the detailing capabilities of the print medium and makes the entire customer interface interactive.

Internet is far more cost effective compared to traditional media. "The Net reaches out to the affluent and Net savvy. This is a dream audience which brand managers spend mega bucks to address. Internet delivers them with very little wastage. Internet allows the message to be targeted by various parameters like timeband targeting, daypart targeting, geographic targeting and even interest-based targeting or contextual targeting. Targeting reduces the wastage and the overall effectiveness of the advertising spend," says an industry expert.

Leading portals in India are relishing this attention. Rediff saw an increase of over 70 per cent in online revenue on its India operations in 2004. Yahoo! India saw a 100 per cent growth in advertising in 2004., the online operations of one of India's leading media groups, estimated total advertising on its site to be around $3.5 mn-$4.6 mn in 2004.

On the other hand, younger viewers are drifting away from TV, spending more time online. They're using the Web to socialise and communicate, downloading songs, listening to radio and podcasts, and playing online games. It won't be long before they turn to the Web for longer-form video and TV, thanks to the rise of broadband. In the US, among 25-34-year-olds, almost a third of viewing now takes place away from the TV set, according to a survey by branded content specialist Contentworx. Instead they are using PCs, mobile phones and handheld computers, the survey found, with results that will make interesting reading for broadcasters and advertisers.

The same trend has been catching up fast in Indian. The restless Gen Y prefers internet to TV. “TV viewing in India is still a family affair. You have to fight for the remote with your family members. Besides, my favourite programmes are broadcast at fixed timing. Surfing the net is more personalised. I can view whatever I want at my own convenient time,” says Rajeev Malhotra, student of Delhi University.

Traditional media, however, is still not ready to accept the challenge thrown by internet. In fact, barring a few many of them hardly take it as a challenge.

“I do not think internet can match the popularity of television or print media. Go to the interiors of India and you will hardly find anyone surfing,” says Sameep Rajguru of Aaj Tak.

Rezaul Lashkar of Indo-Asian News Service does not see the Net as a threat to traditional media. “Every form of media has its own advantages and disadvantages. They all can co-exist or rather they complement each other,” he says.

Despite these sceptical views emanating from traditional media workers, the success of, which is one of its kind website in the world, forces everyone to cast aside apprehensions about the future of internet as a new age media. In fact, Indiatimes is the most diversified internet company in the world, a model, which even Murdoch is trying to follow.

“When it comes to getting the latest news, I prefer logging on to a website than to switch on my TV. I can at least log on to the news that interests me instead of being forced to watch Karishma's spat with husband as breaking news,” says Manoj Das, AGM, Nedfi.

“The most visible advantage of internet is its accessibility. Whenever I go abroad, the only media, which keeps me abreast of Indian political scenario is the internet,” says Sandeep Phukan of NDTV.

Copyright © 2005, Bennett, Coleman & Co. Limited. All Rights Reserved.

Source: The Economic Times (


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