Five More Media Predictions for 2004
By Mark Redetzke
January 13, 2004
Welcome back, everyone! Hope you had a great break. I know I did. Time
with the family, snowmobiling, ice fishing, more food and drink than I
thought possible, and a New Year's Eve wedding. So now, I'll do the cliché
and write the list: my top five interactive media predictions for 2004.
1. Home broadband penetration will far outpace projections.
Most sources project household broadband penetration this year in the
25-28 percent range. Depending on the source you consult now, it stands
around 20 percent. eMarketer, which lists many sources, provides the following
2004 projections:
Gartner G2: 28.2 percent
Morgan Stanley: 26.0 percent
World Bank: 25.0 percent
Jupiter Research: 35.0 percent
I'm as bullish on the near future of broadband as Jupiter (a unit of this
site's parent corporation). Broadband penetration will outpace what the
pundits project because of the war waged between cable companies and telcos.
Each is battling for not just their share of the Internet connection,
but the entire bundle of services they can offer.
Cable companies can offer VoD, TV, Internet, PVR, and more. Telcos can
give you wireless phones, landlines, ISP service, and so on. The war is
driving prices to a point at which they almost reflect something government
subsidized. DSL in my locale is $20 per month. That kind of pricing will
drive increased adoption.
2. File sizes will increase, improving online creative.
As broadband proliferates, ad file sizes will grow. That will allow for
significantly improved creative product. Now we have a lot of creative
people trying to work with pretty small palettes. If broadband grows like
I think it will, that will change.
Take MSN's redesign (nice job, by the way). It has one experience for
broadband users, another for dial-up. It has ad products to match. We'll
see more of that. The winners? Creatives, end users, and ad-serving companies.
3. Home networking will grow and change media consumption.
Home networking will also evolve, thanks to increased broadband penetration.
Everything from simple wireless home networks to smart homes with integrated
media centers will become more commonplace. The result will be a complete
change in the way those households consume media.
With an always-on connection; a laptop that can follow a person around
(or a touch screen in most rooms); a media server that can send music,
photo, and video files from a basement closet to the main viewing room's
home theater; and a Web-enabled PVR to corral it all, no wonder people
will break old habits. According to a 2003 Arbitron/Edison Media Research
study, broadband households consume three times as much Internet media
and one third the amount of TV as the average U.S. household. See the
inverse relationship? Imagine what this means for the media industry as
broadband continues to roll out.
4. Online ad spending will increase (but not as much as you think it
should).
I'm with everyone else in thinking we'll see more money this year. We'll
see sold-out inventory, and prices will rise. We won't see TV budgets
decline to match the reduction in audience; we won't see long-time marketers
abandon what they've grown comfortable with over the past two decades.
So the much-anticipated uptick this year may disappoint a lot of us. But
this will get us where we want to go, eventually. It's still pretty early.
5. I'll be predictable, sort of.
I won't take all my allotted vacation, despite best intentions to do
so. I'll be found in Herreid, SD, on the third weekend in October with
my dad and my dog in pursuit of the wily ringneck pheasant; I'll put my
house on the market but won't sell it (again); and, finally, I will not
satirize my clients in any columns again. Despite what I may have lead
you to believe, that came back and bit me in the rear.
