this week's PR from CBS Interactive, which struggles mightily to persuade readers that online video is really, really good for traditional TV. It failed to convince me, but tucked discreetly at the end of the press release is a nugget of wisdom worth noting.
CBS Interactive very much wants to prove that the online streaming of television shows does not hurt but rather enhances the network's broadcast viewership. Says an executive of Magid Media Labs, the company that produced the study, "The results are clear: by making their programming available through the CBS Audience Network, CBS has expanded the reach and audience for its content without impacting their traditional television viewership." After reviewing the data summarized in the press release, I don't believe this conclusion is clear at all.
For example, the press release proclaims that "35% of the online video-watching audience say(s) they are now more likely to watch CBS programming on television because they connected with the shows online." Doesn't this mean that the vast majority--the remaining 65%--indicated they are no more likely and perhaps even less likely to watch CBS as a result of online programming?
Even if the survey found what Magid Media Labs says it found, what does this mean for the future? If the online distribution of television shows doesn't impact broadcast viewership in 2008, can we assume this will be the case in 2009 and beyond? I believe that would be an incorrect conclusion to make.
The impact of online TV upon traditional TV is limited by two factors at the current time. The first is broadband penetration; according to a Magna Global USA study, the average age of CBS viewers is 54, and the 2008 Pew Internet and American Life Project Survey indicates that just 23% of this age group has broadband access. This means that high-speed Internet access will grow rapidly for CBS viewers in the coming years and as it does, the corresponding increase in online viewing will have a significant impact on traditional TV viewing habits.
The second factor that today prevents online shows from sapping broadcast viewership is the limited selection of programming CBS makes available on the Internet. Currently, CBS.com has no full episodes of hit sitcom "Two and a Half Men," one full episode of "Rules of Engagement," and just two full episodes of "CSI," the network's top-rated TV show. As CBS increases their online selection and offers more complete seasons of programming, consumers will be drawn away from broadcast television and toward the always-on, always-available benefits of online television.
The discussion about whether or not online programming impacts traditional viewership is not the most interesting part of the CBS Interactive press release. Hidden in the final paragraph is this: "68 percent of respondents said that the CBS Audience Network had the 'right amount' of advertising on the site. Overall, 50 percent of respondents correctly recalled the brand of an ad they saw during their viewing experience."
This study shows that decreasing the number of ads (as is done on CBS.com and every other TV network site) improves the value of the brand impression, but this message seems to be falling on deaf ears. Network television has continued to increase ad time and decrease content time in an effort to improve revenues, which are derived from brands seeking to reach and gain affinity with viewers. But the growth in ad time hasn't produced improved brand opportunities; it's increased the clutter and caused consumers to flock to ad-zapping DVRs.
It's easy to see why consumers weary of CBS's advertising overload would express appreciation for CBS Interactive's online ad approach. An episode of "How I Met Your Mother" runs 30 minutes on network television, of which eight minutes is advertising; over 25% of the sitcom's 30-minute running time consists of ads. This same episode lasts just 23:50 if viewed online, which means that a mere 6% of the consumers' time is dedicated to viewing ads.
That fact that over two-thirds of consumers find online TV's less intrusive advertising appropriate is no surprise at all. Nor is it really a surprise that fewer ads means more attention and better recall of the brands advertised. The real surprise is why--when faced with the potential for a shrinking audience, shifts in consumer's leisure habits, growing discontent about ad saturation, and diminished ad reach due to DVRs--networks don't take a page from online TV's success and decrease ad time. Fewer ads can mean more consumer attention, happier consumers, increased ratings, and just possibly improved ad rates.