So says Quincy Smith, the president of CBS Interactive (quoted in the NYT). Is he right?

I think not. Network television revenue has continued to grow in a 500-channel world. Why? Because overall viewership has increased, overall revenue has increased, and the big networks have been able to sell reach at higher CPMs even while niche networks sell targeting. In fact while CBS’s broadcast revenue may hover around $4.5 billion, the CBS corporation’s revenues are over $13 billion. So while the big networks hold their ground, the market as a whole has expanded as distribution expands.

Online distribution is (very roughly) analogous to the explosion of niche cable channels. In the short-term, Mr. Smith is right — CBS won’t generate $4.5 billion by shifting the same content to the Internet. If CBS plays its cards right, though, they can build a lucrative, parallel online distribution channel for new and different content. Armed with new and different ad targeting technology, they may well generate billions of new revenue in the coming years.

Filed under: market size, online advertising