Tuesday, 16 February 2016

The Television world has changed. Media meltdown from the markets.



Investors this week are re-assessing the value of TV.

The TV business is in trouble on two fronts - Firstly from disruptive technology that's ad-free (Netflix) and therefore, declining audiences (bringing less Advertising) and now, from the markets. A perfect storm.

Shares in Viacom, Time Warner, CBS, Fox were all hit last week, greater than the general market declines. Viacom for example, was -25% down, having reported declines in revenue, profit and income.

Disney, who are very diversified with blockbuster movies, even took a hit because of their dependence on TV. Time Warner took a hit because of its loss of subscribers/viewers. Yet, Netflix audiences surge to nearly 50 million in the US.

The problem with traditional TV continues, as viewers have now more (and better) options. 

Whether that's online broadcasting (Netflix, Amazon) or Apps (snapchat, vine) or spending time on Social Media (Twitter, Facebook) or Second screen viewing whilst watching TV - they're simply watching less. That means in turn, less advertising (because advertising money follows audience) and less subscribers (I use it less so why should I pay for it).

Audience ratings of prime shows (which you'll see peppered in this blog) are in steep decline with Nielsen reporting that 25 of the top 35 channels attracted lower audiences in 2015. Shows are in decline too. That's despite the TV industry trying to convince us otherwise through spurious data analysis.

According to The FT, "Wall Street has belatedly realised that the television world has changed. It is unlikely that the latest media meltdown will be the last" and indeed, that reporting will also be self-prophecy.

Of course too, TV is being replaced. By online digital video, something which Streamabout knows so well.