The Big Game

Posted by Sam Churchill on

According to Nielsen, the Super Bowl on Fox was the most-watched TV show of all time, in the United States. Approximately 111 million viewers watched the game.

Fox charged between $2.8 million and $3 million for 30 seconds. Total Network Ad revenue for the game was estimated at $204 million.

It was only topped by the 400m viewers for the World Cup final, which had an accumulated worldwide viewership of 1.5 billion people.

Could the future for on-line media be just as big in, say, 10 years? Mass Media doesn’t do Behavioral Advertising, Cluster Marketing, social networking or transactional events.

How big is big?

Not very, according to Piper Jaffray analyst Gene Munster. He says Android generated $5.90 per user in mobile advertising in 2010. He sees the total increasing to $9.85 in 2012 and adds that the Android Market app store also could boost monetization per user from in-app advertising over the next two years.

Munster notes that former CEO Eric Schmidt last summer said he thought Android could be a $10 billion business if there were 1 billion users each generating $10 a year – and the analyst contends the company is well on the way to hitting the $10 per user level.

Munster estimates Google had $850 million total mobile revenue in 2010, with Android generating about 16% of the total, or around $130 million, which would translate to $5.90 per Android user. (That implies about 22 million Android users for 2010.)

By 2012, he thinks there could be 133 million Android users generating $9.85 a year, which would mean $1.3 billion in Android-related revenue.

I have always assumed that there was some kind of utopian “free” network cloud in the future, supported via advertising. With an Average Revenue Per User of $10/year, that sounds like wishful thinking.

But by the end of 2014, Gartner forecasts over 185 billion applications will have been downloaded from mobile app stores, since the launch of the first one on the iPhone in July 2008.

Apple’s iPad has sold more than 14.8 million units worldwide since its introduction in April. ISuppli forecasts 57 million tablets will be sold this year and 171 million in 2014.

Tablets can show more expensive display advertising. Google predicts that cellphone screens would be the No. 1 screen for viewing the Web by 2015.

Smartphones passed PCs sales this last quarter, says IDC. Some 100.9 million smartphones were shipped in the fourth quarter of 2010, while PC manufacturers shipped 92.1 million units worldwide.

Shipments of smartphones, tablets and other app-enabled devices will overtake PCs shipments in the next 18 months, predicted market research firm IDC.

Morgan Stanley analyst Mary Meeker previously predicted the shift to mobile (above). IDC predicts worldwide shipments of smartphones and media tablets will reach 377 million in 2011, and reach 462 million in 2012, exceeding PC shipments, says IDC.

If revenue from video and display advertising is added to revenue from ancillary services such as applications downloading and services, couldn’t that generate an average revenue of $15-$20 per person per month?

Mass media “wastes” ad dollars. Online media can target individuals – and demand CPMs that are 100 times higher than mass media.

Will broadband wireless move towards free? If it does, the media landscape could split into a “free” service, like radio and television, and a pay service, like cable. What do you think?

Posted by Sam Churchill on Tuesday, February 8th, 2011 at 8:19 am .

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