At the Elevate Video Advertising Summit in New York last week, executives from Disney, Turner, and Comcast nearly sent the audience into cardiac arrest by demonstrating that their heads weren’t actually fully stuck in the sand: before long, the majority of TV content will be available online and on mobile devices.  In fact, Comcast Interactive Media’s Matt Strauss, Turner Broadcasting’s Jeremy Legg and Disney/ESPN’s David Preschlack were more specific than that: 75% of TV content will be on platforms other than TV within two years.  Indeed, TV “everywhere” was imminent and sure to make distribution agnostic.

At face value, that is surely to make viewers ecstatic. But upon reflection, you have to wonder: Will that make Big Media more or less controlling of its content?

To Foresee the Future, Look at Your Kids’ Behavior

We’ve all read the tea leaves, and apparently those who run Big Media have too: “It’s interesting to think of what the definition of a TV is,” said Comcast’s Strauss. “My kids think an iPad is a TV. People don’t think of TV anymore, they just think of video. For us, in the broader context of what we’re doing, we’re beginning to migrate everything to Internet video.”

Job done: I can stop writing this column now.   I am shutting down my company and off to sell T-shirts on the beach.

Then again, as Comcast Interactive Media’s Senior Vice President and General Manager, Strauss is the kind of fellow whom you presume “gets it”; the real question remains, does his boss and his boss’ boss get it, too?  What about all of the company’s shareholders, who may not be impressed with the financial tale of the tape?

Show Me the Money

The economics remain dubious for traditional media companies (TMCs) to drink the Kool-Aid: online video is a $1.5 billion revenue stream, while television advertising weighs in at a hefty $70 billion.  In fact, go to any online video conference these days and everyone shares the same beef: “when will the Web and online video get its due (at the expense of television)?”

Well, sit down, folks.  I think the answer is “Never,” but hear me out.  The notion that television will die is foolish and arrogant.  Print isn’t digital, television is, and in Q1 2011 television advertising hit $19 billion.

Without a doubt, over time, what we now count as “television advertising” and “online video” will converge.  It might not be $35 billion for each (although some trivial number-crunching in Excel will lead you to think that maybe online advertising could surpass television advertising by 2021), but it won’t be at the 70-to-1.5 ratio it is now.

We’ve already touched on:

I)             How online video ad dollars are allocated:

1)  Broadcasters come first

2)  Then followed by portals, be it Yahoo, MSN or AOL or increasingly, YouTube

3)  Ad networks and ad rep firms

4)  Small, mid-size and large publishers

Of course, 3 and 4 could be 3a and 3b or flipped depending on whom you are referring to.

II)           The difference between super premium and premium content:

A)  Super premium is simply content that is produced by studios and networks for (up to now) television and theatrical releaseB)  Premium is the professionally produced content that is produced for (up to now) the Web, which while popular in its own right usually lacks the big budgets, celebrities, polish and restrictions of super premium content.

Without a doubt A) and B) become increasingly blurred as each day goes by.

The Blurring of Advertising Segments

Indeed, at the super premium end (1 above mainly, but to a lesser extent 2, too) where TMCs focus, broadcasters will start to leverage their content and sales muscle to secure more ad dollars online, effectively blurring the line between the two segments.  In other words, what  Strauss, Legg and Preshlack say will happen, but in a very restricted manner where the content will be limited to their

–      own and operated properties (including joint ventures such as Hulu), or

–      video players

to remain in control.  Regardless, this will be a step in the right direction, but it should not be viewed as the free-for-all that online viewers might hope for.  That may never happen.  Never say never?  I am saying never!

Then at the other end of the spectrum (3 and 4 above mainly, but to some extent 2 as well) premium content rightholders will leverage the fact that an increasingly large segment of the population turns to Internet video and OTT (over the top) means to watch content.  At this end of the spectrum, online budgets will poach bigger budgets from television, but the net effect is the same: advertising revenue becomes blurry.

(I will go one step further and argue that i) display and search and ii) display and video will also get blurred through a convergence of creative and strategy, but let’s leave this for another article.)

When Sumner Redstone stated that content is king, I don’t think he was necessarily putting down distribution.  I believe his conclusion was that “with new distribution channels the value of content rises,” which means that you can expect big media to want to retain even more control over it than they do now, which means that there will be great business opportunities for players in content and distribution alike.