Cable Fear D.C. Changes

Television Digest with Consumer Electronics, April 24, 2000

Cable modems will continue to lead DSL deployment in residential market for next 2-3 years, Insight Research said in new report. It said 2 million U.S. homes will have cable modems by year-end, compared with 1.1 million for DSL.

Internet ad revenue more than doubled to $4.6 billion in 1999 from $1.9 billion in 1998, including $1.7 billion in 4th quarter alone, Internet Ad Bureau (IAB) reported. That's still far cry from TV ad market, which exceeds $200 billion annually. Disputing questioning of revenue accounting, IAB said 94% of purchases were paid for in cash, with barter deals accounting for just 6% of deals and 1% of total revenue. Banners made up 56% of ads, sponsorships 27%, interstitials 4%, e-mail 2%, other ad forms 11%. Meanwhile, leading ad company DoubleClick reported revenue of $110.1 million in first quarter ended March 31, up 179% from $39.4 million in same period year ago. Loss excluding one-time items and noncash charges grew to $13.2 million from $3.1 million, but net loss was cut to $18.4 million from $42.1 million.

Clarification: CEA previously refused to say what percentage of DTV display devices include decoder electronics (TVD April 17 p1), although one official mistakenly said all devices included in CEA figures included decoders. Unlike previous announcements that gave total for only all DTV display devices sold, in most recent announcement CEA said only 17% of DTV sets sold to date included DTV receiver electronics.

Seeing promising niche market for TV-Web convergence programming, ESPN will boost its enhanced TV, interactive TV and Web content efforts in next year, ESPN Pres. George Bodenheimer said. Speaking at Washington Cable Club lunch at new ESPN Zone restaurant, he said ESPN will be "back in the saddle" in fall with synchronized TV-Web coverage of NFL games on Sun. and Mon. nights. He said Disney unit also is exploring such enhanced TV coverage of baseball and other sports, after drawing 75,000 users per game for its regular-season, 2-box (set-top and PC) experiments last fall and 650,000 for ABC's Super Bowl enhanced TV telecast in Jan. On interactive TV front, ESPN intends to do more experiments like "NHL Rules," where network commentators responded to viewer e- mails during hockey telecasts this season. With more than 16,000 viewers sending e-mails during recent game, ESPN will extend idea to several baseball telecasts this season, Bodenheimer said. ESPN, which recently opened Internet site for its X Games productions, also aims to expand its growing Web family and offer far more streaming video on its sites despite continuing fragmentation of TV and sports audiences, he said.

Americans are depending more on cable and Internet for election news and less on broadcast, radio and newspapers, according to Cable Ad Bureau (CAB) seminar on political advertising. At seminar, lightly attended because of rain and World Bank demonstrations, speakers stressed cable's growing role as primary source for voters seeking political news. Kevin Barry, CAB local sales & marketing vp, said Pew Research Center study showed that 31% of surveyed voters named cable as their leading source of election news in Jan., up from 23% in 1996. Internet was only other medium to rise in survey, doubling to 6%. On other hand, broadcast network TV fell to 24% from 39% 4 years ago and newspapers fell to 31% from 48% in 1996. Barry also cited 1999 Rocky Mountain Media Watch study indicating that local cable news networks carry more news and less violent content, "triviality" and advertising than most local broadcast stations. Ron Faucheaux, editor-in-chief of Campaigns & Elections magazine, said Web is emerging as "6th medium" for political ads, along with TV, radio, newspapers, mail and phones.