Speeding Down The Road Of Local TV Ad Sales

 The rear-view perspective from TV stations is that cable systems continue to take on the look of an older media business. But TV should be watching the road ahead.

U.S. cable penetration fell to just over 61%, in February 2006, dropping to 68.3 million wired subscribers, the fewest since February 1990.  All while "alternative delivery systems" -- ADS, as Nielsen Media Research likes to call them -- have grown, now representing almost 30% of TV consumers who pay for video delivery.

The biggest business among ADS comes from satellite TV distribution, now at a 25.2% penetration.  Satellite companies are up 4% versus February 2006.

The Television Bureau of Advertising highlights these numbers, with its warning going out to TV advertisers who buy local spot cable. It cautions that this is a sign that business at the local MSO level is declining for those advertisers looking to buy schedules on cable systems.



Since local cable advertising can't be replaced by the satellite delivery systems that have no local commercial insertion, those advertisers would do better to run back to the traditional TV stations.

But no doubt other alternative systems -- such as new IPTV companies, and, of course, new Internet services -- might have another say in the matter.

Traditional TV organizations shouldn't be fighting tooth and nail for the attention and budgets of local advertisers. That energy is wasted, especially when new competitors are on the horizon. Not just those in the YouTube network world -- but those new-wave Internet companies looking to become a modern cable MSO, like Joost or BitTorrent.

 One saving grace: New digital companies have a long way to go in setting up their services, attracting audiences and building mass businesses -- let alone siphoning away significant local advertising dollars.

 But sudden fast-moving travel will make for tighter grasps of steering wheels.

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