Tag Archives: Television network

A New Dark Age?

Are you watching less TV than you used to? If the answer to that is “yes” then you’re not alone. Oh sure, you’re probably spending a lot more time in front of a screen, but when I ask that question I’m asking about cable network programming delivered live or watched via DVR within 3 days. That measurement, by the way, is known in the business as C3 ratings and there is not a lot of good news. Michael Nathanson, a senior analyst with MoffettNathanson LLC issued an analysis of recent data and this lede from the International Business Times sums it up nicely:

The biggest American horror story on cable last year, didn’t come from FX — it came from Nielsen. Ratings across national cable television networks tumbled 9 percent in 2014, triple the decline seen in 2013 and more than quadruple the 2 percent decline seen in 2012. To call it a crisis would be an understatement. If the trend continues, TV could be heading for a new dark ages.

Why the dark ages analogy?  You’re seeing it in the news.  Cable operators pay these networks a lot of money each month (OK, you’re right – WE pay…) but if no one is watching maybe losing those networks from their systems isn’t a big deal.  That sort of explains the stories you read about networks going dark on some systems (as I’m writing this Verizon just turned off the Weather Channel and Dish turned off Fox News for a few weeks)over what those fees might be.  Without a hue and cry from consumers who appear to be moving on to alternatives, the networks have no leverage.

While some in the industry are complaining yet again about faulty measurement methods, the reality is that people are shifting their viewing habits away from live, linear programing.  Even sports, which is supposed to be immune to this, suffered a 5% decline. You’re probably aware that HBO, NBC and CBS are launching their own streaming services. That sort of move might hasten the demise of business model that has fed TV networks with licensing fees as the cable and satellite distributors focus more on their broadband ISP businesses and less on TV.  After all, if they can distribute the programming services for free via their internet side, why pay?

Hopefully this is good news for those of us who pay for this stuff.  What do you think?

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Filed under Reality checks, What's Going On

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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Filed under digital media

Is Streaming Hurting Traditional TV?

Once in a while a piece of research shows up that’s just confusing and such was the case the other day.  GfK Research has been doing annual surveys of network TV viewing for the past six years and the seventh iteration has produced some data that I can’t quite figure out.  Maybe you can help me.

Diagram of Streaming Multicast

(Photo credit: Wikipedia)

Over the last seven years:

the proportion of those who say they “expect to be able to watch my favorite shows on a device of my choice” has nearly doubled, from 19% in 2006 to 34% now. But those who watch network programs via streaming options are now more likely to say that this erodes their “traditional” viewing of the same shows. One in three (33%) report that they watch less “regular” TV as a result of streaming viewing, compared to one in four (24%) who say they watch more — a net differential of -9 percentage points.

In other words, viewers expect the networks to hand them the weapon with which the viewers murder the nets’ business.  After all, if they’re watching less, there are fewer eyeballs to sell.  It’s the old “trading analog dollars for digital dimes” argument.  But let’s turn to the man (Jeff Zucker, then of NBC, now of CNN) who made that argument and gain a bit of insight into the research:

“We believe in ubiquitous distribution, we want our content to be available everywhere,” Zucker said, also noting that “We’re not afraid to try things and stop them.”

He continued: “What we’ve lost in terms of viewers and ad dollars on the traditional analog systems is not being made up for on the digital side. Until we do that, there’s a risk to all our business plans,” said Zucker.

So actually, it seems that what the research is saying is not that interest in what the networks are airing is lessening – quite the contrary.  27% of those who use streaming or downloaded video now say that they “watch a greater number” of shows because of these options — more than double the 2006 figure of 12%. And 21% report that they spend more time watching TV content thanks to digital viewing options.  The problem seems to be with “regular” TV, which I assume means the program stream as offered by the network through your TV at specific times.  Survey results show 33% say they watch less traditional TV with streaming options, while 24% say they watch more.  As recently as 2008, GfK’s research showed that streaming options provided a net benefit to regular TV viewing; that year, the differential was +5 points, with 25% saying they watched more regular TV, while 20% said they watched less.

What all of this seems to mean is overall TV viewing isn’t declining.  The question for TV nets is how to derive as much revenue from streaming as traditional viewing. GfK also found 32% are visiting network sites via a mobile device so let’s put that inventory into the mix as well.  Maybe the research is a cry for sellers to do a better job of getting premium CPM’s for these measurable engaged viewers of the streams?  What do you think?

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Filed under digital media, Thinking Aloud