Curated by Stuart Fogarty stuart@admaticallycom for AFAO'Meara Advertising, Streamabout The Video Agency and Admatic Ireland.
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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.
The US Supreme Court might decide the future of Television, today. Aereo, a start-up, rebroadcasts TV content like Fox, ABC, NBC, CBS on the basis that those signals are free and in turn it charges customers to watch them (about 8 usd a month). Subscribers can watch, record and see a lot of content on their various devices. But cable companies like Time Warner and Comcast, pay those broadcasters billions, to be allowed re-broadcast their content. They in turn sell it on to consumers as part of a cable subscription (like Sky). Broadcasters have sued Aereo on the basis of copyright infringement. However, if Aereo's model is found to be legal, this will be a dramatic day for cable companies and for traditional TV broadcasters. If Aereo loses, it might have to shut down. If it wins....re-broadcasting free signals is now going to expand and perhaps broadcasters will be forced to do it themselves and by-pass cable. For example, NFL (America Football) would overnight be "free to air" through re-broadcasters online. But of course, the bigger picture is copyright and as to who owns it and what rights the copyright holder has. However, the even hugely bigger picture is that TV Broadcasters have now to resort to legal actions to defend their business. Always the sure sign that technology has overtaken them. And it has.
Fox, that great bastion of free right wing media (actually, I watch it a lot so I mean that tongue-in-cheek) are threatening to come off "free to air" and to move towards cable or pay-per-view. In other words, just be available to subscribers. And the reason? Online IPTV re-broadcasters (in this case 'Aereo' in particular) whom are offering live Fox and CBS and ABC and others online for free. They're simply, re-sending the TV signals online for a small fee. And the courts have upheld their right to do so. It would seem that these re-broadcasters have set themselves up exactly within the limits of existing laws. So no need for an antenna or set-top box, you can now see Fox online through Aereo and that's what's bothering Fox. Aereo also allows you to record programmes in the cloud and of course, is available on multi-platforms to watch "as you go". It means that traditional TV Companies are now losing control of their signal, their content and ultimately, their advertising. So if Fox became subscriber only, it would starve IPTV such as Aereo, of content. But then too, it would lose its advertising revenue because numbers of viewers would dramatically reduce. It would also cause problems for affiliates of Fox (such as Sky) who may no longer get access to that content either. IPTV is a threat to broadcasters - of that, there's no doubt. However, one wonders why they don't join the party and develop their own IPTV strategy? In other words, come together as an online brand and compete. So many times, we've seen online destroy businesses who sat back and depended on legal action rather than, get into the space and fight. This to me, looks like another example. Feels a bit like a Fox episode of The Simpsons.
Another nail arrives in the coffin of Television news broadcasting. It's called Google hangouts. What once was the exclusive domain of the Television networks, is now fully open to citizens and with encouragement from Google, they used it at length from The Republican Party Convention. Without the need to call "lights, action, make up", a whole new breed of citizens reported back live about the convention. No trucks, no cables and no, media types.
Standing in front of small cameras or smartphones they did their report, their piece to camera, just in the style of Sky News, Fox or CBS. Some perhaps were a little unpolished - but that will come in time and some broadcasts were a bit, well, "fuzzy" but so too will that be corrected. We are so used to Skype and dodgy cameraphone pics, that perhaps there is an honesty about this type of broadcasting. The fact that it's not manufactured, means it's real. However, in return, what we got was honest news from honest attendees and the start of a technical revolution where "ordinary" people will become adapt at sending pictures back live via streaming networks. And easy it is. Indeed. Google I suppose, is now a TV network in its own right with video "journalists" literally in every street, every home. Whilst the quality might not just be up to standard yet, it will be and one wonders how traditional TV stations are going to compete with this? The answer is they can't unless they got involved in creating their own citizen network which they haven't and they won't. They see the intenet as a threat and so they pooh-pooh it and run away whilst their newspaper competitors embrace it and jump onboard. It is newspapers that will be the new TV. Whilst Google isn't a "content company" (like Streamabout), it is a network that facilitates the distribution of content and although not quite "there yet" it's well on the way. The Huffington Post Live is one of the great early adopters of this type of hangout news. And I blogged here about that recently http://streamabout.blogspot.ie/2012/08/tv-broadcasters-watch-out-newspapers.html See what you think and then ponder the future for TV news. Then think about Netflix and the future of TV entertainment. Then think about Apple TV and the future of TV companies. And wonder how they let it all get past them.
