This blog has beaten to death the struggles of newspapers. It appears that, next in line, will be television. I ran across an article in The Globe & Mail reporting that Canadians, for the first time, spent more time on the Internet than with their television:
The average Canadian now spends more time on the Internet than watching television, according to a new survey from Ipsos Reid, a shift in digital habits that reflects the increasing prevalence of computers in our lives.
This survey, its author says, marks a closing of the gap between a younger generation that has always spent a significant amount of their leisure time on computers and an older generation that used to rely on “old” media. Canadians now spend more than 18 hours a week online, compared to just under 17 hours watching television.
...Industry watchers, however, cautioned the Ipsos results should not be taken as some wholesale shift away from the type of content produced by “old media,” and that this survey's results simply trace an evolution of how we seek and receive information.
“It can be kind of confusing when we try and set these media up against each other,” said Sidney Eve Matrix, a media professor at Queen's University. “If you're trying to separate time spent on the Internet from time spent watching television, that's a bit misleading... The Internet is a multimedia world. We consume our newspapers on the Web.”
I kind of disagree with the professor's view. Yes, the two media aren't directly comparable; yes, the Internet is more of a multi-tasking world. But I would argue that we are indeed witnessing a major shift.
For investors, I think it is very important to realize that the Internet can be a substitute. Even if someone is consuming the same content, the structure of the industry would radically change.
For instance, a lot of people still read newspapers online yet the whole newspaper industry has been turned upside down. There are many reasons for this but let's look at one important element: advertising. One of the reasons newspapers have suffered is due to the shift of advertisers to online campaigns from print campaigns. The online advertising model—very low cost, targetted advertising, etc—has completely destroyed newspapers. The same thing could happen to television.
I hate making macro calls given my poor record ;) but I really wonder about some of the television and cable companies. Tags: media