IT’S DIGITAL’S WORLD AND WE’RE JUST LIVING IN IT: It happened in the US in 2015, and now the rest of planet has finally caught up. According to Magna Research in the attached Recode link, global ad revenue for Digital has surpassed traditional TV spending in 2017. This year Digital ad spending will total $209B which is 41% of the total WW media spend, compared to TV’s $178B/35%. Magna is forecasting Digital to cross the 50% threshold of total media spending by 2020 . . . which is pretty shocking for us old timers to wrap our minds around. One important asterisk to these totals is the role Digital Video plays in this shift. Since OLV is technically calculated as Digital it makes the migration from TV look even more pronounced. But as any self-respecting traditional TV Network will tell you, selling digital extensions of the same content is still TV. Regardless of what side of the blurry line you put Digital Video on, the chart below proves once and for all we’re living in a digital-first media world.
ON THE OTHER SIDE OF THE COIN . . . TV’S RATINGS TUMBLE: Now that we know Digital is surging, you might be asking yourself about the state of Traditional TV. It turns out things aren’t so sunny on the Broadcast/Cable side of the street. According to the latest Moffett Nathanson research, as noted in the attached Inside Radio link, Traditional TV’s “C3” ratings are in a free fall. For a level set C3 is the aggregated viewership from the time a show airs through the next three days of DVR-recorded viewing. The ratings pain is being felt across the proverbial dial. Since September Cable’s C3 monthly ratings have declined by double digits compared to 2016. And the Networks are in even worse shape with NBC “winning” at -11%, ABC at -13%, CBS at -15%, and Fox dropping a cringe-inducing -35%. Some of Fox’s decline can be attributed to the viewership spike from last year’s World Series, and all the networks received a one-night kiss in 2016 from the Presidential election coverage. But those one-off comp bumps don’t explain month after month of significant ratings erosion this year. The simple, painful explanation is that people just aren’t sitting in their living rooms watching set top TV the way they used to. And as we saw in the previous article, as media time shifts from couches to mobile devices so too does the ad revenue.
YOUTUBE GETS CLOSER TO FULL MUSIC LICENSING: Staying with today’s video theme, there’s been progress towards a more harmonious relationship between YouTube and the music industry over performance royalties for the music videos it plays. According to the attached Billboard link, YouTube (aka Google) has inked a direct licensing agreement with Universal Music Group (UMG), which is similar to the one they signed with Warner last month. There are also reports that a Sony deal is about to finalized, which would give YouTube rights to all three of the major labels’ music. One notable provision in the UMG deal is the ability for YouTube to take their videos behind a paywall – which means more content for its existing subscription platform, YouTube Red. There’s even speculation in the industry that once YouTube has direct licensing rights from all the labels in a subscription environment they’ll relaunch Red as more of a full service, ad free music video platform. This would mean even more competition in both the Digital Video and Digital Audio spaces, all in one.
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