Will Social TV Companies Find a Way to Disrupt Hollywood Dominance?
By Karla Robinson
November 20, 2012
November 20, 2012
- At the Monaco Media Forum last week, one digital media banker said social TV companies will find it hard to prove their worth. “When social TV companies say, ‘We can enhance engagement by 700 percent, the advertisers say, ‘So? We’re happy with the engagement we have.’ As far as the TV infrastructure goes, it ain’t broke,” suggests Terence Kawaja.
- Kawaja is a former GCA Savian media M&A advisor who founded Luma Capital. He acknowledges the second-screen trend, but doesn’t see it as a strong business opportunity when considering the control TV networks have on advertising.
- “That’s all well and good — but it’s on the margin,” he says of second-screen businesses. “The thing they teach you in startup school is, solve an existing problem. There’s no problem in TV — at least, not for the people who are funding it.”
- Naturally, online companies think differently. “I love television but I don’t think the current state of television advertising leverages all the potential TV has,” says Benjamin Faes, Google’s media and platform director for northern and central Europe.
- Google and other companies are working to make TV ads personalized like many Web ads are. These efforts could prove fruitless if they directly conflict with the current Hollywood dominance.
- “A lot of digital guys say ‘TV is dead, video’s going to take over,'” Kawaja says. “Not so fast — the producers have a cabal that’s not going to be disrupted any time soon. This is really a lop-sided playing field.”
- “Television ad spend is $70 billion in the U.S. Compare that to online video monetization that’s roughly $2.5 billion,” he continues. “The $70 billion is growing. This cabal is going to make it very difficult to disintermediate.”
- But according to digital companies, the TV industry could soon lose it all. “Even if, today, ad spend is growing on TV, if the TV industry does not act soon, the total amount of value will decrease,” counters Stephanie L’Hospital of France Telecom’s Orange.
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