Analyst throws wet blanket on CATV prospects


Cable brought in about $5B in revenues during 2007, but it’s hoping to ride new interactive advertising capability to a $15B payday by the middle of the next decade. However, according to Tim McElgunn at Pike & Fischer, the industry will be doing well if it rakes in $10B by then. He noted that a large upfront investment in infrastructure will be necessary to even offer an interactive advertising option.

It will then run into several obstacles, including “…the daunting task of reshaping age-old advertising tactics, reduced spending by advertisers across all media, competition from online advertising, and the intensive privacy protections that will have to be embedded in the gathering of user data to enable such features as personalized ads.”

RBR/TVBR observation: There will be no one way to capitalize on web-based adjuncts to a broadcast outlet, but the Pike & Fischer analysis underscores the need to be both creative and realistic. Forces already at home on the Internet are not going to just let broadcasters shove them out of the way; and attractive interactive capabilities won’t come without some upfront CapEx. But the great thing about the internet is that it is the first major competitor to radio/television that actually has room for radio/television to be an active participant. And radio/television can use radio/television to drive traffic to its website, giving it a leg up on internet-only services. Use your brains, use your imagination, and be sure to use the web.