Welcome to the Era of TV 2.0

By Thought Leaders Archives
Cover image for  article: Welcome to the Era of TV 2.0

News broke last week of a deal between Magna Global and YouTube wherein Magna, at the direction of their clients, will shift $250 million in media spend from broadcast television to YouTube. This is how TV 2.0 truly begins.

Digital video is already a $10 billion business -- the chart demonstrating that growth has been up and to the right since the inception of the medium about a decade ago.  The first $10 billion may have been a long slog to get to, but the next $10 billion will only happen in the presence of major changes in the way media buyers approach their craft.  Along the way, those shifts will tell us everything we need to know about the future of television.

We can start with the premise that television -- the hardware (the boxes on the wall) as well as the software (the system of creators and distributors) – is going nowhere.  However, the ecosystem is going to evolve.  We have already begun to spend more of our time consuming video on laptops and smartphones; but the video we are consuming was not necessarily acquired and distributed by the same top five-10 sources that dominated TV 1.0.

The whole system has been shaken up with creators and audiences coming closer together: Creators can deliver straight to their audiences (that’s what YouTube is, after all) and audiences are able to select just the content they want (read: cutting the cord) on their terms.  Once skinny bundles started their ascent -- and they have -- media buyers really needed to take a hard look at the marketplace.

While the first $10 billion milestone has already been gained, we had not seen until now an instance where the buyers have said, point-blank, that a specific (and large) tranche of dollars was moving from broadcast to digital.  For digital to truly grow to where it needs to, those dollars can only come from two sources: incremental funding and broadcast television.  This is that first big step.

It is important to note that $250 million is a just drop in the broadcast bucket: It amounts to roughly three-tenths of one percent of U.S. broadcast spending this year.  But, it’s worth mentioning that it takes guts for clients to commit to that shift because it goes against the old adage, “Nobody ever got fired for buying more TV.”  These clients could very well get fired for shifting money out of TV.

But they won’t.  Because they have made this decision informed by two pieces of knowledge.  First: digital channels are increasingly driving results.  Second: the digital dam has been broken and every year that follows will be more digital centric than the one before it.

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