Can Judy McGrath plug a hole in the dam with her finger ?

The latest issue of the Economist has an article about Judy McGrath’s valiant efforts to turn around MTV Networks (http://www.economist.com/people/displaystory.cfm?story_id=12633125). She seems to be doing all the right things – expanding internationally (where traditional media continues to grow), has bought a casual gaming site (addictinggames.com)and even lunched a hit video game (Rock Band sold 7 M copies). Yet is it enough? Can it compensate for the fact that MTV’s number of viewers declined by 28 % in Q3 (in the 12-34 demo YoY)?

The fundamental problem is that MTV’s audience is the on-demand generation – spending time on Facebook and MySpace and watching video on-line vs. watching TV. Does all that Judy is doing amount to plugging a hole in the dam with her finger ?

If you are reading this blog, you probably already know that on-line video is exploding. The question is what does that mean for broadcast TV, especially as the MTV generation grows older? Will there be broadcast TV 20 years from now?

Just in case you are one of the skeptics about on-line video, here is some interesting data from comScore and the Leichtman Research Group. In July 2008,

More than 142 million Americans watched an average of 80 videos each and in aggregate viewed more than 11.4 billion on-line videos for a total duration of 558 million hours. Google attracted 44 % of the views with 92.1 million people watching an average of 55 videos each on Google. By comparison, all of Viacom (not just MTV) attracted 1/20 the views of Google (2.2%)
31 % of adults online at home viewed video online at least weekly, compared with 25 percent that said so last year. Some 10 % of online adults said they view video online daily
Among those who watched video online, 9% strongly agreed that they now watch TV less often and 4% strongly agreed that they would consider disconnecting their TV service to only watch video online
Furthermore, just remember that the First Law of Technology says we invariably overestimate the short-term impact of new technologies while underestimating their longer-term effects.

About Ashu

General Partner with Foundation Capital. Areas of interest range from digital media, mobile and internet infrastructure to all things related to India. Currently on the board of TreeHouse, Aspire, Conviva, Agni and TubeMogul.
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