Harvard Republican Club Just Did THIS For The First Time In Their History…And Trump Is Furious.

By Brandon Katz / Forbes 

As with every industry, the movers and shakers will always follow the money. For the first time in TV history, the money isn’t being funneled toward actual TVs. Instead, digital platforms continue to eat up more and more business and by the end of 2016, eMarketer projects that U.S. digital ad sales will surpass traditional TV for the first time.

This marks a massive shift in the way business is conducted. It’s a new paradigm for the TV industry that threatens the viability of the old model similar to how the rise in mobile gaming has stunted the growth of portable gaming systems.

According to the report, advertisers will have spent $72.09 billion on U.S. digital advertising by the end of 2016, while TV spending will account for $71.29 billion. This will give digital a 36.8% share in media ad spending, slightly higher than TV’s 36.4%.

“Digital advertising is not only pulling dollars from traditional media, but it’s also creating new opportunities at the local and national level,” eMarketer forecasting analyst Martin Utreras wrote in the report.

It’s understandable why digital ad spending is on pace to surpass traditional TV. Streaming services continue to grow their customer bases, with Netflix (80 million subscribers), Hulu (12 million), CBS All Access (2 million), Showtime Anytime (2 million) and HBO Now (800,000) all ramping up their efforts recently. Beyond the improved selection of streaming services, more and more customers are being seduced by the lower costs that come with cord cutting. In 2015, 385,000 people decided to cancel their standard TV packages.

While traditional TV ad spending is still growing thanks to event-based programming (Olympics, Presidential election, etc.), it will be difficult for it to compete with the convenience of digital TV. eMarketer projects that mobile ad spending will account for $45.95 billion this year and that by 2019 it will cover one-third of total ad costs in the U.S. What’s interesting is that digital ad spending has already surpassed traditional TV in many Western European countries and in China, with the U.S. only catching up now.

What does all of this mean for the TV industry?

Magna Global’s director of global forecasting Vincent Letang told the Wall Street Journal the shift is a “powerful symbol” of the future of advertising. He also noted that the increased emphasis on digital advertising doesn’t mean that companies are spending more on advertising as a whole. Instead, there are now fewer dollars chasing the same ad inventory in traditional media, therefore exerting far less price pressure and maybe even lowering prices on traditional media.

Digital is becoming the dominant player in terms of advertising dollars spent, which indicates a significant change in how we consume content. All of this is uncharted territory for the U.S. TV market.

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RICARDO GONZALEZ V. Editorial

As we say in Mexico: "When you see your neighbor's beard cut, put yours to soak". This means that inevitabily Digital will become the Key Player mediawise as well in Mexico.

Our country normally respresents in different industries around 10-15% of US Market Value and we had a "Grace Period" ( difference in the time when some market behavior happened abroad and when it started to happen in Mexico ) of about 8-10 years. Now the market behavior dynamics are much more faster and now the Grace Period has shortened to 1-2 years or even less.

Just take into account what has been going on inside Televisa's and TV Azteca's recent reorganizations / restructuring ( Changes in Logos, Channel Branding, Stars / Anchors, Programming and personnel deep cuts ) in order to defend their ratings and viewers switching from both Paid & Open TV into Digital Media. Mexicans as Americans, Europeans, Asians are consuming contents in a radical new way: Digitally ( Mobile: Smart Phones, Tablets ).

As Al Pacino said in DEVIL's ADVOCATE movie : "you will never see me coming". This is exactly what happened with Digital Media...Media Tycoons never saw Digital coming ( or at least not so fast ).

If you were Mr. Azcarraga or Mr. Salinas what would you do to survive the inevitable switching from Electronic, Print Media into Digital? Respond to my Twitter account: @richglez664

* RICARDO GONZALEZ VAZQUEZ is a passionate marketer, strategist, creative, bilingual, graduated from ITAM / Bachelor in Business Administration ( Top 5 LATAM's Business Schools ) BOTTOM LINE businesses detonator, ADDED VALUE generator,expert in creating, developing, and reinventing brands/products/services in BLUE CHIP companies of FMCG, Services and Retail. Certified Sales Coach from The Sales Board,LLC., MN. USA