Internet TV key theme watched by DNB’s technology team

Andreas Tandberg-Johansen, head of technology, media and telecom investing at DNB, says that television delivered through the internet is a key investment theme being tracked for its potential to tap into a huge share of global marketing spend.

DNB estimates that Google and Apple have demonstrated their ability to deliver television related services – such as set top boxes – while televisions with integrated software are set to hit the market shortly.

“If they manage to make their TV offering as compelling as their mobile platforms, traditional TV companies will be up against formidable competitors, competitors that can synchronize your user experience across computers, mobile phones, tablets, and TV,” Tandberg-Johansen said.

“In 2011, online advertising in the US amounted to about $30bn. TV ad spending was $60bn. At some point in the future, the distinction between online and television ad revenues will become irrelevant as the two distribution channels merge. The addressable market of Google and Apple will expand dramatically.”

The key difference against traditional television delivery platforms is that Google and Apple are able to track users much more effectively, which means that they can offer advertisers the ability to target their ads more effectively with more relevant content.

Tandberg-Johansen’s fund currently holds Google stock, which he said is priced “conservatively at 11x forward PE”.

 

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