UK: Media Predictions 2010 - Part 1

Last Updated: 4 February 2010
Article by Deloitte Technology, Media & Telecommunications Industry Group

Most Read Contributor in UK, August 2017

Foreword

Welcome to the 2010 edition of Media Predictions. This is the ninth year in which the Deloitte Touche Tohmatsu (DTT) Global Technology, Media & Telecommunications (TMT) Industry Group has published its predictions for the technology, media, and telecommunications sectors. Predicting always presents fresh challenges — which we are pleased to address. This year's report has been shaped by two in particular.

First, the global economy. If there was one advantage to making predictions for 2009, it was confirming the consensus view that most major economies were expected to fall into recession. (They did, with a few notable exceptions, such as India and China.) In 2010, the picture is far more mixed. While it is generally agreed that most economies should recover, there do not appear to be enough shapes or letters available to describe the possible permutations that recovery may take — will it be a U, a V, a W, or a square-root recovery? And a double-dip recession is still possible once the stimulus ends. At the time of writing, governments appeared bullish, corporations more bearish, and economists divergent.

Digitization also continues to be a force. Although it precedes the current recession by decades, it is still contributing to a reinvention of the global media sector. This fundamentally simple transition — the conversion of analog data into digital form and its distribution via digital networks — not only changes the balance of power within the industry but can also reset the scope of other sectors. Anticipating digitization's impact is commendable. But timing is everything and preparation is paramount. Being caught out by the pace of digitization has been, and will continue to be, catastrophic.

Most of 2010's media predictions are focused on the consequences of technological change — particularly digitization — and are shaped by 2010's economic outlook. We address a wide range of topics, including demand for on-demand, online advertising, eBooks and eReaders, business models for recorded music, the integration of television and the Web, print's monetization of digital, the relevance of the vending machine in a digital world, and the short-term prospects for 3D television.

I am often asked about Predictions' track record. We are never likely to be 100 percent correct. But with a sustained focus on pragmatism and an aversion to hype, we are more often right than wrong. We never include a prediction only because it may come true in the next year. Rather, our focus is on identifying potential "black swans" whose impact could have major, strategic ramifications for companies in the sector not just in the coming year, but possibly for many years to come.

As a result, each prediction is designed to start or stoke a further conversation – not to stop it. And we trust that the Predictions' launch, expected to take place in over 50 cities around the world in 2010, reaching over 5,000 industry executives, serves precisely this purpose.

I wish you every success for 2010.

Jolyon Barker
Global Managing Partner
Technology, Media & Telecommunications

Linear's Got Legs: The Television And Radio Schedule Stays Supreme

DTT TMT predicts that in 2010 most video and audio content will continue to be consumed linearly — that is, according to broadcasters' programming schedules. Our estimate is that over 90 percent of all television watched and over 80 percent of all audio content consumed will be via traditional broadcast. Linear will prevail despite the proliferation of technologies, such as digital video recorders (DVRs), pay-per-view, on-demand television, podcasts, and online music services, all of which permit viewers and listeners to opt out of the broadcasters' schedules.

The sovereignty of the schedule runs counter to many commentators' expectations. Indeed, the fact that schedules still determine what and when the majority sees or hears belies many predictions over the last decade foretelling the imminent demise of schedulers, disk jockeys, and conventional broadcasters.

A few, among them many industry executives and their families and friends, may already largely bypass television and radio schedules. But for the mass market, the vast majority of content consumed is likely to be linear. In 2010, average weekly consumption of scheduled television is likely to run between 20 and 30 hours in major markets.1 This compares to an average of 90 minutes to two hours for all forms of nonlinear television, whether in the form of DVDs,2 DVRs,3 or video-on-demand.4 To put the contrast in perspective, US consumption of online full-program video would have to rise over 75-fold just to equal scheduled TV viewing.5

Despite the success of MP3 players and the ubiquity of CD players, the average time spent listening to the radio is likely to be up to about 20 hours.6 In many markets, radio is likely to remain more popular than the Internet, despite the variety of consumer activities and applications available through the Web. In a few countries, the majority of citizens may choose not to listen to any pre-recorded music on any given day.7

Linear's supremacy is likely due to both ease of use and inertia. For some, the ability to choose what to watch or listen to and when is a necessity. But for the majority of individuals, for whom time is less of a constraint, the volume of television watched — an average of 35 hours per week in the United States — makes choosing programs one-by-one tedious and superfluous.8

Linear's lead may actually increase in 2010.9 Generally speaking, the purchase of a new piece of television equipment, or the launch of a new service, such as high-definition (HD) or a movie channel, causes a spike in consumption. In developing countries, sales of new television sets have been particularly strong.10 In these countries, the progress of broadcast television is evident because of strong growth in advertising revenues.11 In many markets, HD adoption rates are progressing steadily.

Consumption of linear TV may also be encouraged by the availability and demise of on-demand sites. The availability of on-demand can increase overall demand for scheduled programming: content watched using online catch-up services can encourage consumers to watch the next episode or listen to a radio presenter's next show live. The most popular content viewed online tends also to be the most popular watched via broadcast.12 And while new online video sites continue to be launched, there may also be a number of high-profile failures, largely resulting from the inability to make online advertising-funded video pay.13

Consumption of scheduled content could also grow because of the introduction of charging for nonlinear services that were previously free.14

Misperceptions of linear broadcasting's imminent demise may be due to misinterpretation of market data. In 2010, many surveys of media consumption are likely to feature self-reported data. Respondents to such surveys tend to reflect their idealized selves rather than their actual consumption habits.15 As a result, documentaries and news programming may be over-emphasized, viewing of traditional media understated, and use of new media and new devices inflated. Some linear consumption may also simply be overlooked, such as the many hours spent listening to the radio while commuting.

Further, comparisons of nonlinear to linear are often nonequivalent. Consumption of nonlinear may often appear greater as the numbers reported are larger.16 But a like-for-like comparison, based on viewing or listening hours, for example, would probably reveal a contrary picture. Broadcast is measured by viewers. Metrics for online video include page impressions, page views, unique users, and requests. Often, little distinction is made between a clip and a full program even though the commercial significance for each may vary considerably. The definition of an online "user" may remain vague,17 as well as the quantification of an online view.18

It may be that in the long run, the majority of all audio and video consumed will be nonlinear. But in 2010, most consumers of content are likely to remain happily beholden to the schedule, rather than resentful of what some pundits have labeled the "tyranny of the schedule."19 However, given that hundreds of millions of individuals may be spending at least 40 percent of their waking hours listening to television or radio, linear is likely to remain dominant not just in 2010 but for many years to come.

Bottom Line

The broadcast industry and equipment manufacturers should bear in mind that consumers do not necessarily embrace the options afforded to them by advances in technology. The behaviors of early adopters do not always become mainstream.

However, the fact that consumers are happy not to choose the majority of their audio and video content does not mean that consumers will not value and pay for the availability of choice. Consumers appear quite content to purchase devices and subscribe to services that they then hardly ever use.

For these reasons, initiatives to offer greater choice via non-linear are valuable, as long as monetization is primarily focused on the option to choose.

Advertisers should carefully analyze the various statistics regarding media consumption. If linear continues to dominate, concerns about ad-skipping on DVRs and the possible success of ad-free video on demand are likely overstated, while buying ads on conventional radio and television may remain more effective than some analysts are forecasting. Advertisers should not necessarily accept the common perception that television audiences are in long-term decline. In several mature markets, as well as most developing ones, broadcast television viewing is more likely to rise than decline.

The industry should also consider that, for many, the schedule is far from an inconvenience. In fact, the scheduler and the content timetable are fundamental threads of the social fabric in many societies. Despite the fragmentation of both television and radio sectors, programming remains a major source of discussion.

The Shift To Online Advertising: More Selective, But The Trend Continues

DTT TMT predicts that in 2010, online advertising spending will not only grow in absolute dollars but is also likely to grow substantially faster than the total advertising market, and continue to gain share. Not all online ad categories will participate equally — display20 is likely to underperform — but the broad category will likely see its global share grow from roughly 10 percent at the end of 2009 to 15 percent by the end of 2011.21

This does not entirely differ from the consensus: there are those who also forecast a continuing shift to online — but some of these observers are not impartial. Meanwhile, the non-online (traditional advertising or media industries) are hoping (and predicting) that the online share gains of the last five years are about to slow, halt, or even reverse. This may be wishful thinking.

Prior to the recession there was a common belief that online share would continue to grow no matter what. The evidence of recent quarters does not support this view. Year-over-year online advertising revenues fell in each of the first three quarters of 2009.22 However, two important qualifiers are necessary. First, although online fell roughly 5 percent, this was still a much smaller decline than almost any other advertising category.23 In other words, even though online growth was negative, it continued to gain share. Second, although the overall online figure was negative, that weakness was largely caused by areas other than search and video. Banner ads, for example, were very weak.24 For the first three quarters of 2009, search actually grew by almost 7 percent, meaning its relative growth rate versus traditional advertising spending widened, even during the recession. There is a possibility that the recession has not slowed the growth of online share, but accelerated it.

As the global economy emerges from the crisis, most analysts expect advertising spending to grow by about 2 percent in 2010,25 albeit from severely depressed levels. However, our discussions with advertisers, ad agencies and traditional media indicate that many advertising buyers continue to believe that online spending offers "more bang for the buck." They also claim that online is currently too small a portion of their spending, and that it is the only solution that allows advertisers to measure the effectiveness of their spending.26 Far from peaking at 10 percent share, some advertisers think that the gains in online seen in the past five years will in fact gather speed in the next five.27

The categories of online that are likely to experience the greatest growth remain search, click, social network, and cost per action (CPA). Based on their performance in the first half of 2009, the traditional media industries that seem the most vulnerable to losing share to online are magazines and newspapers, with radio and outdoor in the middle, while broadcast and specialty TV/cable seem to be the most resilient.28 Regardless of the reasons why, this trend seems likely to continue.

Broadly speaking, any category of advertising that allows for measurement of spending effectiveness is likely to be relatively successful. Advertisers increasingly want the ability to measure effectiveness and are becoming indifferent to other purported advantages.29

Bottom Line

If online advertising continues to gain share in 2010 and beyond, then the bottom line for the media and advertising industry will be straightforward: do what has worked over the last five years. But there is another possibility. The media and advertising industry may be about to undergo "innovative disruption."30 If online advertising turns out to be a disruptive technology, then there are two likely consequences, according to the theory of innovative disruption.

First, the disrupting technology begins to take market share from the existing players — in some cases more than 90 percent — as digital has in the photography market. Second, even when market share is low, the disruptive technology lowers prices and causes the size of the market to shrink. This deflationary effect is partially offset by elasticity of demand (as prices drop, buyers buy more), but usually the market can shrink in dollar value for years. Recorded music would be an example: sales have dropped every year since 2000, and have fallen by almost 50 percent in that time.31

Should online advertising have this effect on the traditional advertising model, industry players would need to plan for a possibly sharp and permanent reduction in revenues and margins. Online represented roughly 10 percent of the $600 billion global advertising market in 2009, and in a disruption scenario could see its share climb over 50 percent, while also causing ad rates to fall and the market to contract.32

In that case, the entire advertising and ad-supported ecosystem would need to consolidate, control costs more aggressively, and seek new business models.

Traditional media companies may need to explore tactics that will allow them to bridge a period of continuing losses in advertising market share. Absolute revenues may increase, depending on the strength of the global recovery, but business decisions predicated on a return to the "old normal" might not be optimal. Cost growth should be restrained in case EBITDA margins are further compressed. These companies also need to embark on a two-track strategy. First, they need to develop an earnings-positive online platform that supports their traditional business. Second, they quickly need to embrace tools, technology, and a new business model that matches the perceived advantages of online, specifically the measurement of advertising effectiveness and delivery of value for dollars spent.

Those who create advertising are also likely to be affected. Generally speaking, ad agencies get paid based on the size of the media buy. Developing a $40 million ad campaign is usually about four times as profitable as a $10 million campaign. But, in this new world, if a $10 million campaign can be measured as producing equivalent results to a much larger spend, then the ad agency should be paid as much money as before. More in fact – since they just saved the ad buyer $30 million. In a world where advertising budgets could undergo innovative disruption, agencies need to charge on the basis of results, not budgets.

eReaders Fill A Niche, But eBooks Fly Off The (Virtual) Shelves

DTT TMT predicts that in 2010 stand-alone eReader devices will likely sell five million units globally. Meanwhile, electronic versions of books (eBooks33) could sell as many as 100 million copies. While the makers of eReader devices might be initially pleased to hear this, the downside for them is that more eBooks may be read on PCs, netbooks, smartphones and netTabs34 than on single-purpose eReaders. With sales of $1.5 billion35 likely, eReaders are far from failing, but competition from other devices is likely to slow their growth rate going into 2011, even as eBook growth remains close to 200 percent.36

The consensus is that eReaders are poised to take off as consumer devices.37 The combination of eInk (a technology that produces relatively high-quality black-and- white images with very low-power consumption) with a book-retailing ecosystem and software (that facilitates eBook purchases) is considered to be sufficient to spur significant adoption by consumers. Some forecasts expect 2010 sales to reach 10 million units38 or more. Further, many analysts have dismissed the threat of non-specialized devices to eReaders, citing their disadvantages of short battery life, form factor, and small screen size.

Although eReaders are likely to experience very strong growth in 2010, the claim of a "breakout success" may be harder to live up to. The devices have been available in various versions since 2004.39 But with roughly 1 percent household penetration today, the eReader's adoption curve lags those achieved by portable and connected consumer devices, such as Internet-connected smartphones, GPS units, and netbooks.40

Consumers have voiced numerous objections to the eReaders currently on the market.41 The devices are seen as too expensive, well above the optimal $199 price point. There are concerns about ruggedness. The display is a major issue. Although eInk technology is more power-efficient, the look has been compared to a dirty newspaper. It can't yet display in color, and the refresh speed is slow. While user interfaces are generally well regarded, consumers are finding the differences between a physical book and the eReader challenging. In one well-publicized test at a large US university, many of the students who were given free eReaders (bundled with e-textbooks) were dissatisfied, citing their inability to attach sticky notes, make notes in the margins, scroll back and forth rapidly, and rely on consistent pagination for citations.42

One challenge to both eReaders and eBooks lies in the different consumer ownership rights for traditional print versions versus electronic versions. Digital books have no right of resale, eliminating the electronic equivalent of the $2.5 billion used-book market (with textbooks representing $2 billion).43 That said, there have been isolated, but well-publicized, instances of eBooks being remotely deleted from users' devices because of copyright issues.44 Finally, and in direct contrast to one of the features that helped sell over two billion MP3 players, consumers who buy a print copy of a book have no ability to add it to their electronic library.

The ownership rights issue seems to be a barrier to consumers adopting eReaders, but does not seem to bother (or not as much) those who are buying electronic versions of books and reading them on non-eReader devices, probably because the content provider can't remotely delete the book.

Although it may seem suboptimal to some, perhaps even defying reason, evidence shows that consumers are willing to read (and in some cases even write45) full-length books on small-screen smartphones or large and heavy laptops.46 Each extreme may seem less than ideal for reading, but it is the general nature of PCs and smartphones — not to mention their ubiquity and connectedness — that has consumers willing to read on a device that is "good enough" rather than buying another expensive and fairly bulky device.

Further, if our technology prediction on netTabs comes to pass, these multipurpose devices will be similar to eReaders in portability and cost, and could be expected to offer an even more credible or desirable eReading alternative to consumers.47

Bottom Line

Magazine and newspaper publishers may be serendipitous beneficiaries of the growth of the eReader. Although most devices focus on the book applications, subscriber revenues for other print content may have potential if enough consumers get used to reading — and paying for — content on their electronic devices. One challenge of getting online subscriptions has been the sometimes complex payment process. Partnering with a single central clearing house, whether an app store or e-commerce portal, could remove that barrier.

The success of eBooks poses a potential challenge for authors and publishers as well. Although eBooks are easy to purchase, the low price for the average title suggests that the economic model is changing. The amount left for content creators and publishers on a $9.99 sales price is likely to be much lower than in the past.48 Lower price points are not new in the publishing industry,49 but these have tended to be restricted to a few best-sellers, not hundreds of thousands of titles. New revenue-sharing models are probably necessary.

The recorded music industry has been badly damaged by the emergence of digitized music, music players, and the piracy that has followed. Yet the CD remains attractive, in part, because purchasers buy the right to make a copy for personal use for their own MP3 player. If those who bought print books or magazines were given a similar right to download content to an eReader, or other devices, it would likely help maintain sales of the physical copy.

As with any transition from analog to digital, piracy is a risk. So far, the problem has not been significant, but there is cause for concern. A recent best-seller saw hundreds of illegal copies available for downloading, only minutes after publication.50 The solution, tighter digital rights management software and devices supporting fewer publishing formats, could cause its own problems of potential "lock-in" issues for consumers, dissuading purchases until a single unified standard emerges.51

Publishing Fights Back: Pay Walls And Micropayments

DTT TMT predicts that in 2010 the newspaper and magazine industry will continue to make noises about charging readers for the online portion of their business. But that talk is unlikely to be matched by actions or results. Only a small percentage of titles worldwide are likely even to attempt to implement pay models, and even fewer are likely to do so profitably. There will likely be at least a few online pay initiatives that result in high-profile successes, although they may be the exceptions that prove the rule. In short, across the entire publishing industry, online revenues will continue to consist mainly of advertising.

Most observers agree that the online newspaper and magazine model of free content supported only by advertising is broken. Even "successful" online sites, with tens of millions of unique users, produce minuscule revenues, measurable in tens of thousands of monthly dollars. Further, the practice of making the entire publication available for free online seems to be accelerating the decline of high-value print subscribers. Some analysts believe that it is impossible to go back to an online paid model, suggesting that "you can't put the genie back in the bottle."52 Others argue that every title should move to a pay model, and that the free model is "flawed."53 We believe that the more likely outcome for the industry will be a mix of models motivated not (in most cases) by the revenues generated, but by the need to reduce ongoing cannibalization of existing print subscribers.

A few pioneer publishers either refused from the outset to join the stampede to free content, or reversed course and starting charging customers for their online versions. So far, at least one or two titles have seen success with this strategy, and print subscriber losses have slowed or even reversed. Online earnings from titles like these may be modest, but they still contribute to the bottom line, and advertising revenues have not been adversely affected, at least for these titles.54 One of these publishers has gone even further, charging separate fees for print and online, and an additional fee for specialized mobile versions.55 One advantage of pay walls for online editions is that although the number of online readers drops (sometimes by as much as 90 percent), the remaining readers are better understood from a marketing perspective and produce higher-quality online earnings and higher click-per-mille (CPM) rates.56

After the success of these pioneers in 2008, many titles considered charging for online access to content, but only a handful did in 2009.57 Several large newspapers and chains once rumored to be thinking about pay walls have now decided against it, or are choosing hybrid models where almost all content continues to be free; however, some very limited premium or specialized content carries a charge.58

Billions of dollars of revenue have already been generated 99 cents at a time. The micropayment model is working well so far in the music and smartphone app markets and is being considered as an option by publishers. Instead of monthly or annual subscriptions, readers will be able to purchase content "one bite at a time" — individual articles for five cents, features for a dime, or editions for a dollar or less.59 But some analysts have argued that newspaper and magazine readers are somehow different and will refuse to pay even small amounts for access to content. Our view is that online readers might be willing to become micropayment customers (or subscribers) — but only if the content is good enough. Further, they are more likely to buy one 99 cent edition than 20 articles at five cents apiece.

That said, 2010 may not be the breakout year for micropayments. There are too many hurdles, such as the likely absence of standardized or convenient methods of payment, as well as a proliferation of payment platforms. Existing credit and debit card issuers, alternative payment platforms, technology vendors, and telecommunications operators might all offer their own micropayment platforms.60 However, purchasing a week's worth of groceries online justifies the time taken to enter credit card details, but acquiring an article for 30 cents in an online newspaper may not. Also, the value of the micropayment strategy to the content provider requires volume. Accepting one micropayment per customer every two weeks might result in transaction costs exceeding gross margins.

Newspapers and magazines will likely at least consider these options in 2010. But the most important strategy will probably be to continue to retain as many print subscribers as possible and hope for a recovery in print advertising linage. Getting that right may have ten times the immediate economic impact of any pay wall, or micropayment.

Bottom Line

The biggest challenge of pay walls is to ensure (before the walls are put in place) that the number of subscribers gained and print customers retained is of greater economic value than the drop in traffic that will almost certainly accompany the move to a paid model. Extensive market research is a must. Early data suggest that publications with wealthier readers may be more attractive candidates for pay walls.61 Publications should use the latest marketing technology to capitalize on their knowledge about online paying subscribers and provide relevant and targeted ads that sell at a premium, not a discount. Further, the walls need to be uniformly secure — forcing some customers to pay — while leaving an open back door will annoy those who do subscribe and subsequently reduce their numbers.62

Those publishers who use pay walls will need to maintain and publicize the premium nature of their content. Excessive cost-cutting will likely devalue the brand and cause online subscribers to shop and read elsewhere.

Publishers considering micropayments should weigh the costs and liabilities as well as the potential rewards. While micropayments can boost revenues, the complexity and scrutiny implicit in offering this payment platform should not be underestimated.

Content creators should try and make transactions as large as possible to reduce transaction costs. Commission models for micropayments are likely to incorporate a minimum cost — reflecting the cost structure of the payment provider. Content aggregators should avoid losing their entire margin on transaction payments.

To read Part 2 of this article please click here

Footnotes

The end notes consist mostly of the principal secondary sources used (published articles, press releases, vendor websites and videos). We have provided a compact URL for all sources that are available via the Web. Some of the sources referenced may require a subscription to view. Additional sources of information referenced in the end notes include discussions with vendors, industry analysts, financial analysts, and other subject matter experts undertaken specifically as input to these reports. The end notes also include further background on some of the points made in the main body of the text.

1. In the US, children aged 2-11 watch 32 hours of television per week. Source: TV Viewing Among Kids at an Eight-Year High, Nielsen Wire, 26 October 2009: http://blog.nielsen.com/nielsenwire/media_entertainment/tv-viewing-among-kids-at-an-eight-year-high. In some markets it is high as 35 hours. Source: Video Consumer Mapping Study, Council for Research Excellence, April 2009: http://www.researchexcellence.com/vcmstudy.php

2. About 15 percent of US households subscribe to a DVD rental service. Netflix is the market leader with 11.1 million customers as of Sept 2009. Source: Movie fans might have to wait to rent new DVD releases, Los Angeles Times, 23 October 2009: http://www.latimes.com/business/la-fi-ct-dvd23-2009oct23,0,1148449.story

3. In the UK, as of May 2009, 5 percent of all viewing was time-shifted via a DVR. At that time, DVR penetration was 20 percent. Data sourced from BARB: http://www.acbuk.net/presentations.php).

4. In the UK, average online viewing was estimated at 61 minutes per week. This assumes an average of 3 minutes per video, which is watched in its entirety. One study of US viewing trends found an average of 14 minutes of television via the Internet per week. Source: New Devices Impactful, But TV Still Rules, Media Week, 29 March 2009: http://www.mediaweek.com/mw/content_display/esearch/e3i21450699a02373c2a0af0f782cd9efbb

5. This assumes an average 900 million monthly views of Hulu in 2010 with an average 20 minutes watched per stream. ComScore estimated Hulu monthly views of 488 million in August 2009, 583 million in September 2009, and 856 million views in October 2009. In October 2009, the average stream was watched for 10 minutes. Our calculation assumes 5.5 hours of broadcast television watched per day. Sources: ComScore: Google Sites Surpass 10B Video Views in August, The Wall Street Journal, 28 September 2009: http://online.wsj.com/article/BT-CO-20090928-710268.html; Hulu Nation is Growing – Fast, Business Insider, 24 November 2009: http://www.businessinsider.com/hulu-nation-is-growing-and-fast-2009-11

6. In the UK, average weekly radio consumption was 20.1 hours; reach was 89.5 percent of the population. Radio consumption is a blend of speech and music of which "specialist news and chat radio" represents 6 percent of all listening for commercial radio stations; speech (Radio 4) represents 12.4 percent of all listening for BBC stations. By comparison, UK citizens listened to pre-recorded music for 5.4 hours per week. In the US, 90 percent of consumers aged over 12 listen to the radio, equivalent to 235 million individuals. Average listening is 21 hours per week. Sources: Communications Report, Ofcom, August 2009: http://www.ofcom.org.uk/research/cm/cmr09/CMRMain_3.pdf; Deloitte Media Democracy survey, UK results, 2008; Radio reaches more than 90 percent of all consumers over the age of 12 each week, Arbitron, 23 September 2009: http://arbitron.mediaroom.com/index.php?s=43&item=629; More than 235 million listen to radio every week reports Arbitron, Arbitron, 15 September 2009: http://arbitron.mediaroom.com/index.php?s=43&item=622; and American Radio listening trends FAQs, Arbitron: http://www.arbitron.com/home/arlt_faqs.asp

7. In the US, radio reaches 77 percent of adults on a daily basis; 37 percent listen to CDs and tapes; 12 percent listen to portable audio devices. Of the last group, consumption of radio was 97 minutes per day compared to 67 minutes for portable music devices. Source: Within ad supported media, broadcast radio is second only to live television, study finds, Nielsen Wire, 3 November 2009: http://blog.nielsen.com/nielsenwire/media_entertainment/within-ad-supported-media-broadcast-radio-reach-is-second-only-to-live-television-study-finds/

8. Source: Video Consumer Mapping Study, Council for Research Excellence, April 2009: http://www.researchexcellence.com/vcmstudy.php.

9. In the US, for the year to H2 2009, growth in time-shifted television in the 30 percent of US homes with a DVR rose by 1 hour 11 minutes per month or 19.5 percent; growth in video watched over the Internet among the 134 million individuals who use the Internet to watch video rose by 59 minutes or 45 percent; monthly consumption of linear television averaged across 290 million US viewers rose by 2 hours 2 minutes, an increase of 1.5 percent. Source: Television, Internet and Mobile Usage in the US, Nielsen, 2nd Quarter 2009: http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/09/3ScreenQ209_USRpt_final.pdf

10. Samsung in $2.2bn China LCD TV venture, FT.com, 16 October 2009: http://www.ft.com/cms/s/0/42527a3e-ba6d-11de-9dd7-00144feab49a.html

11. Television industry revenue (advertising and subscription) has increased by an average of 18 percent per year between 2003 and 2008. As of 2008, advertising revenue in this region was about €10 billion, up from circa €4 billion n 2003. Speech at IBC, September 2009.

12. In the UK, 2008's most watched broadcast program, Wallace and Gromit's Christmas Special, with 14.3 million viewers, was also the most watched program, at 8 million requests, of any broadcaster's Internet television service. BBC's 9 out of 10 triumph in Christmas ratings battle, The Guardian, 27 December 2008: http://www.guardian.co.uk/media/2008/dec/27/bbc-television-ratings; Wallace & Gromit's A Matter Of Loaf And Death biggest iPlayer festive hit, Mirror, 9 January 2009: http://www.mirror.co.uk/most-popular/2009/01/09/wallace-gromit-s-a-matter-of-loaf-and-death-biggest-iplayer-festive-hit-115875-21027473/; Virgin Media iPlayer top 10, The Guardian, 21 July 2008: http://www.guardian.co.uk/media/2008/jul/21/virginmedia.bbc. In some markets, awareness of broadcasters' on-demand sites has become better known than on-demand pure plays. For example In the UK, online television's association with linear is now so strong that awareness of broadcasters' on-demand websites, at 83 percent, now exceeds that for YouTube, at 76 percent or iTunes at 64 percent or illegal download sites , at 34 percent. Source: Deloitte/YouGov survey of UK population, July 2009.

13. At the end of 2009, one major exit from the online video space was Joost, which had been regarded as potential challenger to broadcast television. For commentary on Joost's exit, see: Joost is now officially dead, techcrunch, 24 November 2009: http://www.techcrunch.com/2009/11/24/joost-acquired-adconion/

14. News Corp. Sees Hulu charging fees for access, MSNBC, 22 October 2009: http://www.msnbc.msn.com/id/33438370/ns/technology_and_science-tech_and_gadgets/; ITV to charge viewers for BGT clips, Broadcast, 10 July 2009: http://www.broadcastnow.co.uk/news/broadcasters/itv-to-charge-viewers-for-bgt-clips/5003462.article; Free is flawed for TV online, Broadcast, 20 August 2009: http://www.broadcastnow.co.uk/comment/free-is-flawed-for-tv-online/5004650.article; YouTube may stream movie rentals, Reuters, 3 September 2009: http://www.reuters.com/article/technologyNews/idUSTRE5816W120090903

15. Self-reported data per se, see: http://www.creative-wisdom.com/teaching/WBI/memory.shtml

16. For example, see: http://mashable.com/2009/10/09/youtube-billion-views/

17. A user of nonlinear video may be defined as someone who has watched 15 minutes or more of online video at any time in the previous three months. This is the threshold used by Netflix in its quantification of users of its streaming service. In that time the typical television user consumes 260 hours of content: http://files.shareholder.com/downloads/NFLX/743398168x0x326109/43b9da9f-9555-440b-9442-704116af9344/NFLX-Transcript-2009-10-22T22_00.pdf

18. With online, a piece of content need only be watched for a fraction of a second to be counted. By contrast, reporting on television and radio use, while not without its flaws, is likely to remain more robust and transparent than its nonlinear equivalent. Measurement of broadcast television includes an agreed-upon understanding of how many minutes a program has to be watched for it to be considered as viewed. See: 'Most Watched' Video On The Web Doesn't Mean What You Think, The Business Insider, 29 October 2009: http://www.businessinsider.com/most-watched-video-on-the-web-doesnt-mean-what-you-think-2009-10; Time to adjust the set, FT.com, 28 October 2009: http://www.ft.com/cms/s/0/6712e47e-c3fc-11de-8de6-00144feab49a.html

19. Parallel universe may spell the end for broadcast TV, The Guardian, 3 September 2000: http://www.guardian.co.uk/business/2000/sep/03/internet.bigbrother; Could this be the beginning of the end for broadcast TV?, Access my Library, 10 November 2003: http://www.accessmylibrary.com/coms2/summary_0286-8988177_ITM; FutureMedia heralds end of broadcast TV, C21 Media.net, 9 December 2005: http://www.c21media.net/news/detail.asp?area=89&article=27969; The age of permanent net revolution, The Guardian, 5 March 2006: http://www.guardian.co.uk/business/2006/mar/05/newmedia.broadcasting, BBC introduces flexible TV with online trial, The Independent, 3 May 2004: http://www.independent.co.uk/news/science/bbc-introduces-flexible-tv-with-online-trial-562053.html; NBC Uni future hinges on new-media content, Hollywood Reporter, 14 September 2005: http://www.hollywoodreporter.com/hr/search/article_display.jsp?vnu_content_id=1001097717 for a longer term view: "Future of TV: The video-on-demand guru", BBC News, 27 November 2006: http://news.bbc.co.uk/2/hi/entertainment/6144350.stm

20. http://en.wikipedia.org/wiki/Banner_ad

21. Projection based on growth in online and some measure of price deflation in traditional media advertising rates.

22. IDC: Worldwide online ad spending drops slightly in Q3, PC World, 11 November 2009: http://www.pcworld.com/businesscenter/article/181919/idc_worldwide_online_ad_spending_drops_slightly_in_q3.html

23. US ad spending fell 15.4 percent in the first half, Nielsen reports, Nielsen, 1 September 2009: http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/09/2009-First-Half-Ad-Spending-PR1.pdf

24. IDC: Global online Ad spend has bottomed out – but real growth won't show until Q1, paidContent, 10 November 2009: http://paidcontent.org/article/419-idcglobal-online-ad-spend-has-bottomed-out-but-real-growth-wont-show-u/

25. Bernstein research Q3 ad report: cable posts growth, Broadcasting & Cable, 11 November 2009: http://www.broadcastingcable.com/article/388553-Bernstein_Research_Q3_Ad_Report_Cable_Posts_Growth.php

26. Interviews with industry executives undertaken specifically for this report: per discussions with advertising and advertiser executives, while the measurability of online versus non-online was an important factor, it was not the most important factor. Advertisers believed that the key reason for using online was that it delivered the best value for money. Even if non-online was equally able to provide metrics, but did not change its prices, online would continue to grow share.

27. Interviews with industry executives undertaken specifically for this report.

28. http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/09/2009-First-Half-Ad-Spending-PR1.pdf

29. 2010 Outlook survey shows marketing budgets to grow, BtoBonline, 16 November 2009: http://www.btobonline.com/apps/pbcs.dll/article?AID=/20091116/FREE/311169985/1444/FREE

30. Disruptive technology, Wikipedia: http://en.wikipedia.org/wiki/Disruptive_technology

31. Music sales fell in 2008, but climbed on the web, The New York Times, 31 December 2008: http://www.nytimes.com/2009/01/01/arts/music/01indu.html

32. Targeting efficiency could kill the media business, Cross Targeting, 24 October 2009: http://www.crosstargeting.com/targeting-efficiency-could-kill-the-media-business/33/

33. Although the industry term is eBook, we include more-than-casual reading of other content normally found in print, including newspapers and magazines.

34. Priced between $400 and $800, they are likely to weigh less than 500 grams and measure about 20 cm by 12 cm by 2.5 cm. They are expected to include cellular mobile and WiFi access, full-color touch screens, and well-populated "app stores." They occupy the consumer device niche between smartphones and netbooks.

35. One challenge with eReader sales estimates is that much of the data is not released. The following citation shows the possible error magnitude: small changes in assumptions can produce a range where the high estimate is double the low. Source: eReader sales estimates – all eReaders, iReader Review, 18 August 2009: http://ireaderreview.com/2009/08/18/ereader-sales-estimates/

36. The quarterly numbers are US only, only from a limited number of publishers, and do not reflect industry discounts. The retail numbers may be 100 percent higher. Industry Statistics, Openbook.org: http://www.openebook.org/doc_library/industrystats.htm.

37. "E-book" a la vista, La Vanguardia, 24 October 2009: http://www.lavanguardia.es/free/edicionimpresa/res/20091024/53809993640.html?urlback= http://www.lavanguardia.es/premium/edicionimpresa/20091024/53809993640.html

38. Forrester's eReader holiday outlook 2009, Forrester, 7 October 2009: http://www.forrester.com/Research/Document/Excerpt/0,7211,53825,00.html; and Kindle 2 costs $185, 3.5 million eReader sales in 2009 – iSuppli, iReader Review, 21 April 2009: http://ireaderreview.com/2009/04/21/kindle-2-costs-185-35-million-ereader-sales-in-2009-isuppli/

39. Sony LIBRIe – The first ever E-Ink e-Book Reader, Mobile Magazine, 25 March 2004: http://www.mobilemag.com/2004/03/25/sony-librie-the-first-ever-e-ink-ebook-reader/

40. Economy + Internet Trends, Morgan Stanley, 20 October 2009: http://www.morganstanley.com/institutional/techresearch/pdfs/MS_Economy_Internet_Trends_102009_FINAL.pdf; How Americans spend their money – chart, New York Times, 10 February: http://graphics8.nytimes.com/images/2008/02/10/opinion/10chart.large.gif

41. http://www.theglobeandmail.com/news/arts/not-exactly-kindling-his-passion/article1372600/ and http://web2.sys-con.com/node/605099 and http://www.wired.com/gadgetlab/2009/06/blackandwhite_ebooks/

42. Kindles yet to woo University users, The Daily Princetonian, 28 September 2009: http://www.dailyprincetonian.com/2009/09/28/23918/

43. An economic analysis of textbook pricing and textbook markets, ACSFA College textbook cost study plan proposal, September 2006: http://www.ed.gov/about/bdscomm/list/acsfa/kochreport.pdf; and Are used book sales good or bad for publishing?, iReader Review, 3 August 2009: http://ireaderreview.com/2009/08/03/kindle-and-used-books/

44. An Apology from Amazon, Amazon.com, 23 July 2009: http://www.amazon.com/tag/kindle/forum/?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdMsgNo=1&cdPage=1&cdSort=oldest&cdThread=Tx1FXQPSF67X1IU&displayType=tagsDetail&cdMsgID=Mx2G7WLMRCU49NO#Mx2G7WLMRCU49NO&tag=kwab-20

45. Writing on your iPhone: One novelist's Story, The Writer's Technology Companion, 6 January 2009: http://www.writerstechnology.com/2009/01/writing-on-your-iphone-one-novelists-story

46. Flurry Smartphone industry pulse, October 2009, Flurry, 1 November 2009: http://blog.flurry.com/bid/27796/Flurry-Smartphone-Industry-Pulse-October-2009

47. Can the Apple tablet kill the Kindle?, PCMag.com, 26 October 2009: http://www.pcmag.com/article2/0,2817,2354658,00.asp

48. The Kindle killed the book star, Wellington Financial, 15 May 2009: http://www.wellingtonfund.com/blog/2009/05/15/the-kindle-killed-the-book-star/

49. Do I hear $8? Amazon stares down Wal-Mart in price war over best sellers, Barron's, 16 October 2009: http://blogs.barrons.com/techtraderdaily/2009/10/16/do-i-hear-8-amazon-stares-down-wal-mart-in-price-war-over-best-sellers/

50. How can publishers limit e-book piracy?, Channel 4 News, 18 October 2009: http://www.channel4.com/news/articles/arts_entertainment/books/how+can+publishers+limit+ebook+piracy/3391502

51. Don't buy an e-book reader: The sorry state of digital slates, CNET UK, 9 November 2009: http://crave.cnet.co.uk/gadgets/0,39029552,49304199,00.htm

52. Chris Anderson: Newspapers need to find the 'pet for their penguin', The Guardian, 30 June 2009 http://www.guardian.co.uk/media/pda/2009/jun/30/chrisanderson-wired-longtail-freemium-newspapers-businessmodels; and The Newspaper Genie Can't Be Stuffed Back in the Bottle, Mark Evans Tech, 11 May 2009: http://www.markevanstech.com/2009/05/11/the-newspaper-genie-cant-be-stuffed-back-in-the-bottle/

53. The end of the age of free, The Guardian, 10 May 2009: http://www.guardian.co.uk/media/2009/may/10/music-news-murdoch-free-google; and Interview: Rob Grimshaw, Publisher, FT.com: Newspapers Must Add Paid Content, Paid Content UK, 10 May 2009: http://paidcontent.co.uk/article/419-interview-rob-grimshawpublisher-ft.com-newspapers-must-add-paid-conten/

54. The case for charging to read WSJ.Com, Blogspot, 22 March 2009: http://newsosaur.blogspot.com/2009/03/case-for-charging-to-read-wsjcom.html

55. Unless you subscribe to BOTH print and online: Wall Street Journal iPhone and BlackBerry App Free Lunch Is Over, Gizmodo, 15 September 2009: http://gizmodo.com/5359948/wall-street-journal-iphone-and-blackberry-app-free-lunch-is-over

56. Interview: Rob Grimshaw, Publisher, FT.com: Newspapers Must Add Paid Content, Paid Content UK, 10 May 2009: http://paidcontent.co.uk/article/419-interviewrob-grimshaw-publisher-ft.com-newspapers-must-add-paid-conten/

57. Pay walls never may come at some papers, Blogspot, 3 November 2009: http://newsosaur.blogspot.com/2009/11/pay-walls-never-may-come-at-some-papers.html

58. Ibid.

59. Research: Readers Favour News Micropayments – But They'll Only Pay Pennies, Paid Content UK, 12 November 2009: http://paidcontent.co.uk/article/419-research-readers-favour-news-micropayments-but-theyll-only-pay-pennies/

60. Google Developing Micropayments And Subscription System To Save Newspapers, The Business Insider, 9 September 2009: http://www.businessinsider.com/henry-blodget-google-launching-micropayments-and-subscription-system-to-save-newspapers-2009-9

61. CHART OF THE DAY: The Journal Has The Richest Readership Among Print Pubs (NWS, NYT), The Business Insider, 19 November 2009: http://www.businessinsider.com/chart-of-the-day-wealthy-print-readers-2009-11

62. News Corp COO ponders overhaul of WSJ's paywall system, others still don't think it will work, Editorsweblog.org, 13 November 2009: http://www.editorsweblog.org/multimedia/2009/11/news_corp_coo_ponders_overhaul_of_wsjs_p.php

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