TV Moving from 'Reach' to 'Targeting'

Largely because the Internet (and cable, which started it all), television will be forced to move from reach to targeting. (See related online broadband "channels.")

It's somewhat more complicated than that statement suggests, but, directionally, that's what's going to happen. This is something we discussed on our TV panel at Drilling Down.

The TV audience is going to further fragment. The ad model has been based on reach; so how do you sustain the ad revenues that have allowed the creation of (quality) programming?

The short answer is more segmentation. Yet there will always be a demand for quality programming among viewers. HBO and Showtime have attracted audiences because they offer better shows (but that's paid content, not advertising supported). Then there are shows like Desperate Housewives, rare network hits that will continue to attract large audiences. However, the rest of American broadcast TV is increasingly a wasteland of cheap-to-produce "reality TV."

But consistent, large audiences will increasingly be a thing of the past.

There will be three (maybe four) strategies for TV producers and outlets going forward: demographic segmentation (Lifetime, Logo, SpikeTV, Nickelodeon, etc.), garbage/voyeur TV (Fear Factor, The Swan, Maury Povich), quality (HBO, which is very expensive to produce) and advertising as TV content (but this doesn't address the audience fragmentation problem).

Alternatively, more targeted cable, IPTV and Internet TV (online broadcasting/video search) may be able to generate advertising premiums through highly targeted ad opportunities. This is another take on segmentation. (But none of this solves the Tivo problem.)

It was the best of times, it was the worst of times.