Digital TV Reshapes Viewing Landscape

NEW YORK TV is going digital, and consumers and vendors have no choice but to adapt.

Nothing about TV will ever be the same, says eMarketer, which in a new report predicts that 90 percent of all households in the US will have digital TV by 2009, skyrocketing from 51 million homes today to over 111 million in a four year period.

According to the researcher, adoption of digital TV will surge because analog TV signals will be shut off, and thus consumers will be faced with choosing between digital TV or no TV.

The other big ramification from the shift to digital TV will be the much-rumored convergence of all media on the Internet, says eMarketer. More and more TV content will be consumed on devices other than TV sets, and virtually every form of entertainment will be distributed through broadband pipes in the digital TV world.

“We continue to live in a parallel universe where the PC/Internet world is separate from the TV/broadcast world, but their future is inexorably intertwined,” said Ben Macklin, eMarketer senior analyst, and the report’s author. “All movies and all music will eventually be distributed via the Internet.”

This rapid penetration of digital TV promises to dramatically effect the delivery of TV content as well as the current broadcast network sales model, says the report.

And while reports sounding the death knell for commercial TV are nothing new, eMarketer’s predictions are rather aggressive in their time frame and scope. “Digital TV is reshaping whole industries, and almost everything is about to change,” says the report.

For one, along with Digtial TV will be widespread adoption of TV functions which eMarketer refers to as “Advanced TV.” The researcher predicts that nearly 50 percent of households will begin using both digital video recorders and/or video on demand services by 2009, throwing a major wrench into the appointment TV business model.

“Advanced TV users are more likely to watch TV outside of scheduled times and avoid more commercials,” says the report. The result will be a substantial loss of TV ad dollars if advertisers do not adjust their media allocations: “tens of billions of dollars of TV advertising will miss the mark.”

The report sternly warns against sticking with a traditional programming schedule. “The challenge for traditional media and advertising companies is to ensure that the form and structure of their companies is not wedded to the functions and consumer behaviors of the past. It would be perilous to assume that TV norms such as “prime time,” the 30-second ad break, passive TV and linear entertainment will remain the same.”