Wednesday, February 24, 2010

For Networks, Web Can Increase TV Ratings

For Networks that rely on advertising revenue, the web is not evil. Viewers can walk and chew gum at the same time and they do watch TV and surf the web simultaneously. In fact, as the article suggests, the web's social networking tools allow a virtual water cooler to occur at the moment the show is airing. No waiting till the next day at work to talk about last night's show. "The Nielsen Company, which measures television viewership and Web traffic, noticed this month that one in seven people who were watching the Super Bowl and the Olympics opening ceremony were surfing the Web at the same time."

The challenge of talking to viewers in different parts of the country can limit this interaction and so some programming is being shown at the same time across the country. "Seeking to capitalize on the online water-cooler effect, NBC showed the Golden Globes live on both coasts for the first time this year, and the network reportedly wants to do the same for the Emmy Awards this fall, so the entire country can watch (and chat online) simultaneously." Ratings for broadcast networks should continue to grow again.

The challenge does remain for networks and cable operators that rely on cable subscription to grow revenue. Consumers are growing more weary of paying exorbitant fees and are using competition as one alternative to find lower rates. And cable operators continue to use Promotions and incentives off their regular prices to keep customers from switching. But the web will enable us to drop cable subscription and receive programming strictly through a web connection. Operators will try to recoup that loss through higher usage fees and other means. But as network license fees rise so will cable subscriber fees. How consumers fight this inflationary war will sure include how the web effects this business.

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