TV Everywhere to Boost Ad Market

As new media players such as Netflix and Hulu compete for TV viewers who are willing to view content through a variety of platforms, cable TV companies are fighting back. The TV Everywhere initiative was started last year by Time Warner with the goal of rolling out content to viewers who want to watch quality programming through their TVs, online or through mobile devices. Analysts like the idea and predict this initiative will bring more revenue, especially ad money, to the TV industry.

The TV Everywhere concept should be completely rolled out in the next 3–5 years. The way Laura Martin, a Needham and Co. analyst, sees it, the U.S. “TV ecosystem” is worth about $330 billion. This value will increase by another $24-$48 billion because of TV Everywhere. As pay TV operators roll out new services which allow consumers to access content when and where they want, their revenue will also increase. The bigger news may be that large content owners will command up to $10 billion a year in additional  advertising revenue. This growth will come about as operators sell space on the new media formats which will show TV content to consumers on demand.

Some analysts have worried that the digital platforms such as Hulu or YouTube might erode ad revenue for TV operators. However, Martin says the size of the expected ad revenue for large established content providers who participate in the TV Everywhere initiative will “dwarf any near-​term revenue streams from digital platforms (Hulu, YouTube etc).” Martin also believes the strategy is low risk. The added services, expanded TV-​viewing platforms, will mean “additional revenue rather than economic cannibalization.” As a result, TV media sales reps may find themselves with a lot more inventory to promote.

[Sources: Sazlai, George. TV Everywhere $12 Billion in Annual Revenue. Hollywoodreporter​.com. 20 Jan. 2012. Web. 8 Feb. 2012; Reisinger, Don. Time Warner chief – TV Everywhere. News​.cnet​.com. 5 Dec. 2011. Web. 6 Feb. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.