INSIGHTanalysis: Media Healthcheck – August 2006
August brought with it the news that the UK remains the only country in Europe with over 50% of households having digital television services. The figure was revealed in a report from Datamonitor, who also forecast that by 2010, 95% of UK households will have made the transition to digital TV (see UK Only Country In Europe With Over 50% DTV Services).
The IPA report also showed that TV viewing hours have fallen for the seventh successive quarter year on year, with the British population now viewing an average of 3.43 hours a day.
Away from more traditional forms of viewing, iSuppli Corp said that the number of global IPTV subscribers will grow to slightly more than 63 million in 2010, rising at a compound annual growth rate of 92.1%, from 2.4 million in 2005 (see IPTV Subscriber Base Set To Grow). iSuppli also said that the IPTV subscriber base will generate more than $27 billion in overall IPTV services revenue in 2010.
Meanwhile, eMarketer said that the US IPTV subscriber base will grow from 300,000 to 8.7 million by 2010, adding that the potential number of subscribers in IPTV capable households could top 50 million (see US IPTV Subscribers To Reach 8.7 Million By 2010).
Staying with the internet, In-Stat said that the worldwide market for online video is expected to expand by a factor of 10, growing to more than 131 million households by 2010 (see Online Video Market To Grow Tenfold By 2010).
At the end of the month, financial services company Merrill Lynch forecast that international online ad growth rates will reach 35% and 24% in FY06 and FY07 (see City), whilst JupiterResearch predicted that online ad spend will reach $15.7 billion in the US this year and $25.9 billion by 2011 (see Online Adspend To Reach $25.9 Billion By 2011).
However, there was a stark warning from McKinsey & Co that by 2010 traditional television advertising will be one-third as effective as it was in 1990. The McKinsey & Co report said that this would be due to an assumed 15% decrease in buying power caused by cost per thousand rate increases (see Effectiveness Of Traditional TV Advertising To Decline).
As a possible antidote to this though, paid product placement could become more important as new revenue models emerge. This would certainly seem to be a possibility, especially in light of PQ Media’s, Global Product Placement Forecast 2006.
The PQ Media research revealed that global paid product placement spending in TV, film and other media grew by 38.8% in 2005 to $2.21 billion, with similar growth in 2006 taking that figure to nearly $3.07 billion in 2006 (see Global Paid Product Placement Surged 42.2% In 2005).
Online gaming is a sector which advertisers should definitely take note of, especially if one looks at the research which was released last month by Nielsen//NetRatings, which showed that the online games audience has grown over 16% in the last year, which is more than four times the rate of overall internet growth (see Youngsters Fuel Growth Of Online Game Sector).