Tag Archives: Mass media

November 25, 2013 · 11:09 am

Vampire Media

Let’s begin the week with another look at the declining state of my former business, television.

iPad 2 - Home Screen

(Photo credit: William Hook)

Now you might find it odd that I feel the business is in decline given that viewing of content created for TV (both network and cable) is pretty solid in the aggregate.  I agree.  I’m not one of those folks that thinks there’s nothing good on TV.  In fact, I think there’s more really excellent programming on than maybe ever before.  The issue is that it’s spread out among hundreds of channels, each of which we consumers are paying for in some way.  Unless, of course, they’re on a pay channel such as HBO in which case only a minority of homes have a chance to see it.

But that’s not our topic.  Instead, I want to talk about vampire media and their role in all of this.  No, it’s not a tome about “True Blood” and its ilk.  Vampire media refers to iPads, other tablets, and other devices which come out at night, generally in the home.  It’s through these devices that much of what was primetime viewing has shifted from the big screen and the major content providers to the small screen and other providers.  You’ll notice I’m not saying “small providers.”  YouTube is bigger than any TV network in terms of viewership and reach.  Most importantly for our discussion today, these devices do not require a cable to deliver video, just an internet connection.  The effect?

In just a year and a half, cable television providers’ share of the video market has declines from around 52% to 47%.  In fact, Nielsen‘s estimate of TV households has declined each of the last two years, the first time I can ever remember it ever declining at all.  Sure, the business remains solid for now, but that’s due to two factors – high ad rates masking the audience declines and the subscriber fees the content distributors take in.  In my opinion, that too will change in the not too distant future.  Higher fees are coming from a smaller user base.  At some point the economics of paying for a lot of content you never consume don’t make sense.  This admittedly long piece does an excellent job of summarizing all the numbers.  You should check it out.

The holidays are here.  More tablets, Roku boxes, Chromecasts, and new video consoles, all of which permit the viewing of most of the same content available via traditional programming services will be sold and received.  The vampires are coming out.  Have they landed at your house?

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October 16, 2013 · 8:44 am

The Early Warning System Is Going Off

There’s always a scene in movies about some epic disaster during which an early warning system goes off.  A young scientist believes a comet will hit the Earth but the older scientists tell him he’s nuts.  A tsunami monitor goes off when there are calm seas and the woman watching it disregards the information.  You know the drill.  As the audience, we know that disaster is coming but those who have the information are blissfully unaware until disaster strikes.millennials-broadcast

I thought of that as I read a couple of articles the other day.  The first is from the good folks at Poynter who reported on some research the NY Times did.  Quite an eye-catching headline:

Thirty-four percent of millennials surveyed watch mostly online video or no broadcast television, new research from The New York Times says.

Now granted, the study was among 4,000 current users of online video so one could argue, like the woman watching the calm sea, that the sample is skewed.  The again, given the high percentage of young folks that are online video watchers, I’d listen.  After all, cord cutting is no longer dismissed as the rantings of some early adopter lunatics.  There are numbers that prove it’s for real, especially since we’re not talking about “cord-nevers” – young people who never had cable TV – just a broadband connection for streaming.  As one report had it:

While 3.2 million new U.S. households were set up in the last three years, the paid-TV industry only added 250,000 subscriptions in that same period.

Not so good.  And if that’s not a loud enough alarm, here comes the near-miss fireball from out of the sky that gets everyone’s attention, courtesy of our neighbors in the Great White North:

The Canadian government will soon require cable and satellite television providers to make it easier for customers to buy only the channels they want rather than pay for bundles, the country’s industry minister said on Sunday.

“We don’t think it’s right for Canadians to have to pay for bundled television channels that they don’t watch. We want to unbundle television channels and allow Canadians to pick and pay the specific television channels that they want”

Sound familiar?  It should, since it’s the same fight that’s been brewing here for several years and which intensifies each time your cable or satellite bill goes up.  Cable executive are rightly scared that their penetration into the household base will fall, making subscriber revenues drop and ad sales impossible.

Young people tuning out in droves.  The fundamental business model under attack.  Have we reached the end of the TV world?  Not yet.  But in my mind the early warning systems are howling.  What do you think?

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July 11, 2013 · 11:03 am

Fewer PCs And Fewer Cords

I saw two articles in the last day that might not seem to have much to do with one another but in my mind point to the ongoing changes in the media world.

English: Desktop computer Français : ordinateu...

(Photo credit: Wikipedia)

The first is from the Gartner folks along with IDC and it’s their quarterly report on PC shipments. Not surprisingly, the numbers aren’t good.  They are reporting around an 11% decline in shipments which continues a downward trend from last quarter.  There are a number of reasons to which analysts attribute this trend but the one with which I agree the most is the thinking that we’re now consuming media mostly on tablets.  PC’s are something that are used for heavy lifting – video editing, lengthy writing, spreadsheets, etc.   Families aren’t buying multiple units for the home any more (at one point we had four PC’s here for school work, business, and leisure usage among the family).

The second piece has to do with cord-cutting and comes from the folks at eMarketer:

Research company GfK surveyed US households with TVs and found that in 2013, 19.3% of respondents had broadcast TV only and did not subscribe to any pay TV service. That’s a 37.9% increase from 2010 when only 14% of households shunned pay TV services and relied solely on broadcast TV…The study suggested that while wider online video viewing and more internet-connected TV options may have boosted cord-cutting, basic cost savings is at the real heart of the move toward broadcast-only TV. The study found that 60% of those who cancelled their pay TV service cited cost-cutting as the reason.

I disagree with the notion that it’s the cost alone.  I think it’s more the cost/value equation (the expense to get the programming live vs. the cost of other sources on a delay) coupled with the wider penetration of tablets as cited in the first piece.  The market favors tablets over low-end computers, content producers are doing a better job of populating that channel, even to the detriment of their traditional distributors, and the business model (selling ads against an audience that’s viewing simultaneously) has been seriously disrupted.

I’m watching to see who moves to accept the new world and who denies that things are moving.  It’s sort if a climate-change analogy in my mind.  You can deny it right up until the ice pack mets and floods you out or you can take preemptive measures and move to higher ground.  Which are you doing?

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