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At Day one of MIPCOM, I had the opportunity to the first of their Keynote Mastermind Series - a tête à tête between powerhouse PricewaterhouseCoopers and industry heads from BBC Worldwide and TF1 in France.
What really surprised me, is that PWC, which is both the largest of the 'Big Four' accountancy firms and the largest professional services firm in the world with offices in 757 cities across 151 countries, over 163,000 people under employment and total revenues of $26 billion in 2009 can seriously be making predictions on the 'brilliant' growth of linear TV advertising spending from 36 per cent to 37 percent by 2014 without taking in how connected TVs will probably completely reshape the landscape by then and certainly cause huge disruption in the glowing models they showed at MIPCOM yesterday.
Let's look at some of the work of Shelly Palmer, the author of Television Disrupted: The Transition from Network to Networked TV, the seminal book about the technological, economic, and sociological forces that are changing the broadcasting industry.
Today, at Seeking Alpha, Palmer came up with some interesting notes:
According to Eric Anderson, VP of Content and Product Solutions, Samsung will sell over 8.5 million Internet connectible flat screen television sets this year. And, approximately 5.5 million of them will be broadband connected and registered online within a week or so of being purchased. This stopped me in my tracks. Peter Schwartz, Vizio, Senior Director Product Management was also on the panel, and when asked, he told us that Vizio would sell approximately 7 million Internet connectible televisions this year and the company expected about 4.5 million of them to be broadband connected and registered within a week or so of purchase.
I asked if these numbers were published and publicly available, both gentlemen said they were. So let’s do some back of the envelope math. Take the biggest players in flat screens: Sony (SNE), Samsung, LG (LGERF.PK), Vizio, Sharp (SHCAY.PK), Panasonic (PC), Toshiba (TOSBF.PK), Sanyo (SANYY.PK), Mitsubishi (MIELY.PK), etc, and add up all the connected TV set sales expected for this year. Let’s say 25 million sets that will actually be broadband connected this year. Multiply by three and up the estimate each year to account for a drop in price and increase in popularity of the services, and it looks like the United States will have over 75 million broadband connected television sets fully installed by 2013.
The CEA has a different estimate as do some other research firms, but they are all higher than my little back of the envelope calculation.
Currently there are about 115 million television households in the US of which about 100 million of them are currently cable, satellite or IPTV subscribers, with the final 15 still using antennas.
But my question is to PWC, how will the broadcast television business change as Consumer Electronics (CE) manufacturers start controlling screen real estate, start toying with advertising, start dealing with subscriptions to services, and tap into the some 450 billion dollars of global ad budgets that are up for grabs? From the pitch I saw, Nothing.
More from Palmer:
To help you emotionalize this statistic, remember that almost every household in America has more than one television set and the deployment of new flat screens will not be one per household. These new connected televisions will be purchased by people who have excellent broadband connectivity to their homes and can afford to purchase new flat screens — in short, the most affluent, most desirable demographic for almost every advertiser and marketer.
And what about CE manufacturers and Google TV - which is what looks to turn the living room flat screen into an total web/tv convergence where a few hundred channels becomes a few million overnight? With a huge community of open source Android developers all looking to tap into those billions as well?
As @dqandrade (Diogo Q Andrade from Vitri Media) noted on Twitter during the event:
#mipcom Price Waterhouse uses the same video from last year. A sign of the crisis they claim is ending.