Report: Online broadcasting not yet threat to TV

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TORONTO -- Traditional TV networks will see no significant competition from, or profit in, online broadcasting for some time, Convergence Consulting said in a report released Wednesday.

The Toronto-based consultancy said there was as yet no compelling economic model that will lead North American broadcasters to lessen their reliance on traditional TV and accelerate their migration to online streaming of their content in pursuit of advertising dollars.

"To do so would put CAN$3.4 billion ($3.3 billion) in traditional TV advertising revenue and CAN$1.7 billion ($1.66 billion) in cable, satellite, telco TV provider programming fees at risk," the report said of the Canadian TV industry, which mirrors the experience of U.S. broadcasters.

The Canadian report argues that traditional broadcasters are in a transition to the Internet, but online broadcasting remains for them a side business.

"Online is ... another complimentary distribution window for the TV players, which in contrast to traditional TV offers 70% less available advertising minutes/per hour," the report said.

Network TV garners huge audiences that appeal to advertisers, while online streaming of the same content secures smaller audiences and fewer commercial minutes.

Canadian broadcasters have been slow to put content online as the digital rights to U.S. full-episode content is either prohibitively high, or unavailable.

"Going forward, especially as U.S. players start to generate better online viewing metrics, we expect to see more deals between the U.S. and Canada," the Convergence Consulting report said.

The study concludes that the best strategy for Canadian broadcasters and their U.S. counterparts is to grow their online advertising revenue while they lessen any negative impact on their traditional TV advertising ad programming revenue.
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