Online Newsroom Investment - 2006 Annual Report

There were signs in 2005 of bigger investment in online video.

For now, advertising on online video — though growing — remains a minor factor. A market research firm, Broadband Enterprises, estimates about $200 million will be spent on Internet video ads in 2005, up from $75 million in 2004. pales in comparison to the $65 billion spent on broadcast and cable television ads, but it is growing faster.²⁰ It may be that news sites are in an experimental phase , waiting to see whether audiences will become increasingly comfortable with watching video news reports over the Internet .

In 2005, CBS News was not the only news organization to begin offering more news video on its web site . After its subscription-only strategy was implemented in 2003, CNN announced in the spring of 2005 that it would begin offering some of its video online free.²¹ It will continue to also charge for most of it, through an online news channel known as Pipeline, where users can sign up for an annual, monthly or even daily subscription for 99 cents a day.²²

In July, the Associated Press announced it would launch an online video news network for its newspaper, television, and radio Web sites in the United States.²³ And then in November, Microsoft announced it would develop the AP’s online video network and share in any ad revenue generated by the newspaper and television news sites that distribute the video. Specifically, MSN’s role would be to provide the software to play the video and technical support. Moreover, it would sell the advertising.²⁴

And CBS’s rivals got more serious about online video in 2005. MSNBC.com announced it would start posting the entire video newscast of “NBC Nightly News,” though ads on the television newscast would not transfer to the online version. A spokeswoman for the Web site discussed, however, the possibility of selling ads that would appear on both the television broadcast and the Webcast.²⁵ Later in the year, MSNBC.com announced it would also make “Meet the Press” available as an on-demand video; the ad sales model had not been completed as of December, 2005.

And in January 2006, ABC News also announced a similar project to showcase its new co-anchors, Elizabeth Vargas and Bob Woodruff.²⁶

There are plenty of hurdles ahead. Growth in video is linked with growth in broadband. Another obstacle to more frequent use, according to the research, is exposure: more than half of Americans (52%) have said they are not watching more video because they were not aware of its availability.²⁷ The biggest question, however, is probably whether consumers like watching video online, not just on computers but on iPods, phones, and PDAs. Or will video, for better or worse, just be better on television?