Who will pay for TV?

The tables have turned when it comes to advertising: while the infamous internet startups of the late 90’s all failed to sustain their ahead-of-the-times business models on advertising alone, Web 2.0 could not exist without it. Meanwhile, television is rapidly going through one of its toughest transitions since the private broadcasting model was enabled by advertising in the 1950’s.

The New York Times today carried a piece on the growing concern over digital video recorders like TiVO that make it invitingly simple to skip TV ads in recorded programs. From the article:

What this [growth of the DVR market] means for traditional advertising can be divined in data collected by TiVo, which has 4.4 million subscribers. Davina Kent, a TiVo vice president, said that when its customers watch recorded programs, they skip 70 percent of the commercials.

This has not escaped the notice of advertisers. Josh Bernoff, a principal analyst at Forrester, predicted that “next year, you’ll see significant decline in TV ad spending as a result of digital video recorders.”

This is only one of the many major industry shifts and rifts that have been caused by the Internet and digital media since their worldwide adoption has soared in the last five to seven years. Telephony, Music, Radio, Newspapers, Travel – soon to be joined by home entertainment & movie distribution and others. Why? There is no simpler answer than to say: the Internet has been as open platform until now.

see NYT: Someone Has to Pay for TV. But Who? And How?