Broadcasters: What Business Are You Really in?

[Commentary] Any TV company -- including the major broadcast television networks -- that generates more than 50% of its revenue from selling video advertisements is in the video- advertising business. It is not in the content business, as it would like to believe. TV content is simply the delivery mechanism for video advertising. This is an important distinction. A range of delivery mechanisms have arrived and the ensuing tsunami of available video inventory is going to threaten all broadcasters who don't recognize this emerging phenomenon and address their customers' changing viewing habits and needs. Fundamentally, video advertising will no longer be tied to TV content. This is not a futuristic prediction, as the inventory shift is already clearly evident in two massive categories. First, the web has begun to democratize the ability to use video content as a delivery mechanism for video advertising. Second, large publishers and display-advertising networks used technology to turn display inventory into video- advertising inventory. These days, display inventory is already the largest pool of video advertising outside of TV, and is growing quickly. [Tod Sacerdoti is CEO and founder of video-advertising network BrightRoll.]