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Television takes a tumble
New York : The retreat of new-media upstarts has brought no joy in television land in America. As the dot.coms crashed, dragging stock markets with them, so, eventually, did television advertising. Overall, TV advertising market's growth this year is expected to be the lowest since 1991. Last year was unsustainably good, with a fortunate timing of events. And not everyone was expecting this year's luck to be as bad as last year's was good. But these blows are not signs that TV will be rendered obsolete anytime soon, nor are there signs that the longstanding challenge of cable to the big networks is increasing. In fact, for all their suffering at the moment, many TV giants are breathing a sign of relief. Some are backing away from their Internet investments as fast as they jumped into them two years ago. Most networks have been only too happy to retreat from a strategy that they saw as largely defensive. But the TV business is still heading for some sharp rocks.The problems are not new. For a start, America's television industry is growing more fragmented by the day. There is also the increase servicing of Digital Satellite and interactive television. The number of cable stations has kept growing, spreading advertising too thinly for many to make money. Moreover, Americans are watching less television. All this has conspired to turn a rich business into a relatively poor one. The cost of producing content is rising even as audience share shrinks. Anticipating a tougher business climate, the networks have over the past decade become part of large conglomerates, to gain efficiencies of scale such as shared content and advertising sales. Online powerhouse still dwarfs the television networks' audience. The overall market for such services continues to grow, as the infrastructure for delivering rich interactive content expands. Meanwhile, television stagnates. Maybe it is still better off joining online competitors than competing against them. - The Economist Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
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