Walk around any big city and inevitably you’ll come across some person wearing or carrying a sign proclaiming that the end is nigh. They’re warning about an impending apocalypse. While they’re generally seen as a little odd (a polite way of saying nuts), I suppose at some point they’re going to be right. Hopefully, that time isn’t close.
With that preface, and with the recognition that my timing might be off, I think we’re seeing signs that the end is nigh for the TV industry in which I grew up as a businessperson. If you’ve been paying any attention to the media landscape over the last decade, you’ve seen some changes in what I’ll call Big TV (cable and broadcast). To a certain extent, TV has adapted and their basic revenue model hasn’t changed a whole lot. Sure, broadcast TV has done a good job of mirroring the cable model of dual revenue streams by gaining carriage fees, but the ad model – dollars for eyeballs – is pretty much the same as when I sold, even though the demographics are a bit more precise as the industry adopts additional data sources.
So why is the end nigh? Let me offer a quote from YouTube’s CEO as presented at their “newfront” and quoted by Cynopsis:
To make her case, CEO Susan Wojcicki rattled off a startling statistic: “YouTube now reaches more 18–49-year-olds than any network broadcast or cable,” she said. “In fact, we reach more 18–49-year-olds during primetime than the top 10 TV shows combined.” Her assertion is backed up by a Nielsen study of US viewers that Google commissioned. Wojcicki also confirmed news that broke earlier in the week: Between 2016 and 2017, Magna Global,Interpublic’s ad-buying unit, has committed to spending at least $250 million on YouTube instead of TV.
It’s a truism in media that dollars follow eyeballs (eventually). Other than live sports and breaking news, those eyeballs have been departing the BigTV guys for a while, at least in the traditional form via the traditional channels (we program, you watch when we offer a show). While the digital dollars have been increasing (and will pass TV spending this year), very few marketers admit to cutting TV for digital. Magna has because according to them, 18- to 49-year-olds watch an average 26 hours of linear TV per week, down from 32 hours in 2009. Dollars follow eyeballs. As Adweek reported:
Magna Global’s $250 million investment in YouTube advertising will come straight from its TV budget. The $250 million investment is four to five times Magna Global’s typical YouTube budget. As a result, the firm will spend less on traditional marketing overall this year as TV ratings dip.
So you tell me – is the end really nigh for Big TV or am I just another nut carrying a sign around?
Consult Keith 