Peter Kafka

Recent Posts by Peter Kafka

It’s 2012, and Web Video Still Hasn’t Made a Dent in TV

Everyone watches a lot of Web video. So, obviously, the people who spend a lot of money advertising on TV are going to start spending that money on the Web.

“Go where your customers have gone,” Google chairman Eric Schmidt told advertisers at a YouTube pitch event this spring.

Except that TV ad spending hasn’t gone anywhere, and it doesn’t look like it’s going anywhere.

Year in, year out, advertisers have been dumping around $70 billion into TV, and the Web video guys really haven’t captured any of it. The growth they have seen comes mostly from ad dollars moved out of other Web properties.

That’s the message behind this chart, prepared by investment banker Terry Kawaja and entrepreneur Dave Morgan for a public chat the two men held earlier this week. Not coincidentally, that fits nicely with Morgan’s thesis: The Web ad pioneer’s newest company, Simulmedia, is focused on delivering TV ads, not Web ads, because that’s where the money still is. 

But what about all the deep-pocketed would-be disruptors that want to get into the TV business, like Google, Apple, Amazon, et al? Can’t they bust up the TV industrial complex?

Maybe, say Kawaja and Morgan. But that’s different from disrupting the TV ad business — if those guys get in, the ones likely to lose out are the existing TV distributors, like Comcast and Time Warner Cable. Then again, any TV Of The Future still needs to get delivered to your home via pipe, and the pipe guys can’t be budged …

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work