Myers Attacks ‘Incomprehensible’ Forrester iTV Forecasts

As an example, Forrester has forecast that the iTV industry will generate £5 billion in video-on-demand (VOD) advertising revenues by 2007; Myers says that the figure will be well under $500 million. In fact, Myers predicts that the total iTV ad spend in 2007 will only be $1.5 billion.

“How can Forrester responsibly project $5 billion in revenues for an industry that today has virtually no revenue base? Where will the $5 billion come from? Advertising itself will only grow at a compounded rate of less than 5 percent for the next five years,” argues Myers.

In order to get anywhere near Forrester’s $5 billion, spend would have to be taken from other media, claims the article. But is this really likely given that the sector ‘has no established infrastructure for advertising sales, media buying, research or administration?” it asks.

Myers is worried that the continued over-inflation of growth forecasts is damaging to the new media sector, as investors will find themselves disappointed when the promised cash fails to roll in. He has even called for the US Justice Department to launch a full investigation into the motives of Bernoff and other Forrester analysts in promoting what Myers sees as ridiculous prognostications.

As a further example, Myers notes that the total ad revenue all US cable operators in 2002 is projected to be less than the $5 billion that Forrester is forecasting for VOD revenue alone by 2007.

“Bernoff’s projections seem so unrealistic that they have become laughable to those in the advertising and media industries who have some sense of reality. But to an investment community that depends upon Forrester for analyses and financial decisions, an overly ambitious set of expectations, when unrealized, can result in troubled times when numbers fail to materialise,” he says.

Myers own forecasts are shown below.