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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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik