More ads hit online TV as Web audiences grow

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For both networks, viewership online grew anyway, a sign that viewers don’t seem to mind.

The CBS and CW examples show that for big-budget TV productions, at least, it’s possible to make enough money from the Internet to pay for shows if audiences suddenly shift entirely online. Newspapers and music companies have struggled with similar dilemmas as their audiences have moved online.

Networks still make far more money from TV than from the Internet, largely because online audiences are still comparatively small. Networks also get a piece of the monthly bills that viewers pay to satellite or cable companies for TV subscriptions.

Americans on average spent about 160 hours a month in front of the tube in early 2010 and only seven watching video on a computer or phone, according to the latest data available from Nielsen Co.

But online video is growing fast. According to online ad firm FreeWheel Media Inc., people watched 9 billion online videos from clients such as Fox, CBS and Turner in the last three months of 2010, an increase of about 50 percent from the previous quarter.

ZenithOptimedia expects online video ad revenue in the U.S. to grow 22 percent this year to $3.3 billion, compared with just 5 percent growth for all TV ads to $59.4 billion.

For the networks, there’s a side benefit to the growth of online ads. If Internet viewers watch shows with exactly the same ads as their TV counterparts, they will be counted in Nielsen’s regular TV audience ratings.

That means that when networks approach advertisers every spring to sell commercial time for their upcoming fall lineups, they can add online audiences to their total count and bring in more money.

Until April, the online audience didn’t count at all in the advance sales season.

“It’s recapturing those eyeballs,” said Jeremy Legg, a senior vice president at Time Warner’s Turner Broadcasting System. “From a monetization standpoint, it’s the most effective for us.”

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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