Web Execs: TV Merging With Internet

by Erik Sass, Mar 21, 2006, 6:00 AM

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Internet companies will increasingly rely on TV networks to provide online content, Yahoo Executive Vice President Greg Coleman predicted Monday at a panel in New York hosted by the Advertising Research Foundation.

"They do have the content," Coleman said of the major TV industry players, adding: "the answer is going to be partnerships of all different kinds."

Michael Barrett, executive vice president of AOL Media, agreed that TV and Web companies need to work together. He said that online journalism had flourished, but added: "the stuff that's really early on still is the entertainment offerings." Seeking an explanation, Barrett pointed to TV executives' fear of losing control over their content: "There are a lot of rates issues--a lot of protection issues." Nonetheless, he too predicted much greater cooperation in the near future.

Joanne Bradford, corporate vice president of global sales and trade marketing and chief media revenue officer for Microsoft, said that even though the Internet and television are melding, TV isn't likely to dominate the smaller, fledgling Internet advertising market. "The industry is not at a place where you can just turn over what we do to television," she said, stressing that online ad sales are driven by data. "It's a very different sell--it's bought in a different way; the back-end reporting structure is different."

Still, Bradford noted that online agencies' capacity to place premium inventory still lags far behind demand--meaning that a huge pot of ad dollars are being lost every year. "Until we're at the place that we have operational scale and ease of use as an industry, we're always going to be behind," Bradford warned, concluding: "[TV's] not as efficient as we are, but we don't have the scale that they do."

As the two industries collide, and possibly combine, many questions clearly remain--among them, what will the content landscape look like? Although panelists were for the most part reluctant to make sweeping predictions, Clark Kokich, president of Avenue A/Razorfish Worldwide, did offer one bold forecast, saying: "In three years, the content offered by these companies will be virtually identical." Kokich cited competition for consumers who are increasingly in control of their media consumption as the driver for this convergent evolution: "I think that's just a natural outgrowth of the maturation of the business."

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