US TV Firms Tap Broadband Ad Potential

17 May 2005

US TV companies are hitching their wagons to the surging numbers of internet users signing up to fast broadband connections.

This lucrative advertising medium has prompted Tennessee-headquartered Scripps Networks, the TV arm of media group EW Scripps, to launch the first of several online broadband channels.

The new services, to be introduced over two years, will feature original material and reformatted existing programming from it popular category TV brands. The first channel under development at Scripps will feature kitchen design.

Company president John Lansing says the channels will be supported by advertising. He adds, confidently: "The demand from the advertising community for broadband inventory is so high we can hardly keep up with it."

There are now around 60 million American broadband homes, according to web usage tracker Nielsen NetRatings. Internet advertising could hit $8.8 billion (€6.95bn; £4.74bn) in 2005, a 25% increase over last year, says media-buyer Universal McCann. In contrast, the big four broadcast TV networks are expected to boost ad revenue just 2% this year to $16.8bn.

Scripps is following MTV's launch last month of a web channel, MTV Overdrive, airing both new programs and shows that have run on MVT. And CNN is boosting its internet presence by making video content on available free.

Data sourced from Wall Street Journal Online; additional content by WARC staff