“ABC thinks you’re an idiot” says Marc Andreessen. And I’m tempted to agree. This goes back to a previous post. The theme is that ABC (and others, including cable companies) are trying to prevent consumers from fast-forwarding shows when they watch them on demand, in a trend that has been going on at least since 2005. This is yet another example of media companies fighting their customers tooth and nail when it comes to advertising. Instead of accepting that customers don’t want advertising and trying to find another business model, or simply raising prices to make up for the fact that customers aren’t watching the ads, these companies insist on trying to enforce the same old business model.
There’s a fair amount at stake here, to be sure. Total advertising spending in the US in all media is estimated to have been $155 billion or so in 2007 according to TNS, with the biggest single category being Internet spending (although only because TV is broken up into several sub-categories). However, taking Comcast as an example, it made $1.5 billion from advertising in 2007, compared with $17.7 billion from video services, so it’s less than 10% of total revenues from TV for the cable companies.
Surely the combined brains of the television networks and the cable companies, together with the satellite guys and new telco competitors, can come up with some way to offset these declines as people make more use of DVRs and on demand programming. Otherwise, we’ll begin to think that they - and not we - are the idiots.
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