Monday, 25 November 2013

The Death of TV and the stats to prove it. Landmark research from BusinessInsider.



Very, very, interesting article from BusinessInsider entitled 'The Death of TV. TV is dying and here are the stats that prove it'. It follows from research by 'Citi Research' and this is a landmark, elaborate, piece of work. 

You'll get the whole story here http://www.businessinsider.com/cord-cutters-and-the-death-of-tv-2013-11

US Pay TV (cable) is having its worst year ever

This links with another blog I wrote on November 8th (which follows in my posts), where Nielsen reports that tablets and mobile will be more advertising important than TV in 2016. It also follows which all of us in the business already know.....TV is dying on its feet (Streamabout is active in online video so we understand the TV market).

Audience ratings "have collapsed" and with all the major TV providers losing subscribers (about 5 million subscribers cancelling). The number of cable subscribers will drop below 40 million for the first time ever. It's something a lot of us knew, but didn't have the data to support it.

Time Warner Cable lost 306,000 cable subs and 24,000 Internet users. 

The CEO of a cable company, Charter Comms, expressed surprise that a staggering "1.3m of his 5.5m customers (a quarter) didn't want TV", they wanted broadband only packages - meaning they're switching online alright, but not to watch TV. 

Even ratings for major sporting events are in decline. Like Baseball...




Like Basketball..



So this is a real example of the shift to Internet where consumers are watching video and not, TV. They're watching shows and movies notably on mobile and probably as part of a broadband/Wifi 'deal' from a Telco. Or from the proliferation of free Wifi at a variety of stores or indeed, from city hotspots. But they're not watching traditional TV programmes, as they air live.

The other fundamental, is that more and more households, now have less "TV's" as we know them but rather, connected boxes like Apple TV or even via their Xbox or an internet set-top box. They want fast Internet access speeds with online content. Nielsen, the doyenne of TV research,  are even reporting this decline.



So if people have less "TV's", they'll watch less TV as it's aired. They now have a global choice of frankly, better content.

Mobile video is on the other hand, booming, with about 40% of all YouTube videos being watched on mobile. Staggering. And again, as you'll know, YouTube video is not TV programming in the main.

Tablets too, are being viewed more during the key TV primetime, so each device has its moment across the day. But if tablets are being used during primetime, advertising effectiveness is diluting.



Of course too, as I've blogged about so many times, Advertising money is not following this shift. Yet. 


Old habits die hard - the US TV Ad revenue is 64 Billion Dollars whilst mobile is a mere 3.4 Billion. It certainly raises questions about TV Agency buyers who are supposed to buy on the basis of data, rather than cosy "back margin" volume deals. 

Most US Advertising money goes on traditional TV by a mile. Yet TV prices are increasing reports Morgan Stanley....as indeed, bizarrely, are cable subscriptions!! Questions should be asked.


The former Time Warner boss, Glenn Britt, nailed it I think, when he said that "the cable business had spent too many years complacently dismissing the competition" and that is such a well worn lesson. 

They have also been actively producing spurious data in vain attempts to try to keep convincing clients that TV is ploughing ahead, when it's not.  

It happened in the music business, it happened in the retail video rental business, it happened in the bookseller business and now it's in the TV business. For me, this is the crux of the matter leading to this downfall.

Rather than dismissing online, they should be embracing it.

Slowly, but surely, the game is up.