Duncan’s posterous

On 25/07/2008, at 12:05 PM, Robert Seidman wrote:

It’s kind of up my alley.  I don’t know if your conclusion is correct or not.  I’d argue that newspapers already failed, even with the web.  Too much of their high margin business was classified ads that can never likely be recovered due to Craigslist, Ebay, etc.  Surprisingly to me I thought at least a few major papers would make it up in online ad revenue (NYT, Washington Post, LA Times, etc) but so far they too have been hammered.

True, and the shift away from classifieds is seriously killing the industry..and there's a lot of blood yet to be spilled. But as newspapers fall, those sites that remain must logically benefit from additional readers online (and newspaper sites are growing, stats show that), and given enough time some of those remaining outlets should work out some way to make a profit out of it. I just don't see an industry that has hundred of years history dying out in a generation, and I also see newspapers desperately trying to adapt. Most newspaper sites in Australia offer video now for example, and we've even seen consolidation in media companies so companies like Fairfax (Sydney Morning Herald and others) now owns a chain of radio stations. They all know, like any website, there only chance of surviving is scale and a desirable content. I'd bet that some survive, and eventually even thrive. 

 

There are many things we hold commonly true which do not hold up with actual data.  Two years ago, I’d have agreed with you that reality shows chased viewers away.  It’s simply not true.  I’ve attached the historical top 20 spreadsheet from 1959-2007.  What you’ll see is that the #1 show in 2007 (American Idol) *outperformed* the number 1 show in 2002 (Friends).  The numbers for 2008 aren’t in this spreadsheet but they’re similar to 2007 at the top end and I think need to be discounted regardless because of WGA strike issues – though that doesn’t acct for American Idol which was down some vs. 2007.  

There will always be hit shows, but single shows don't fix the wider trend, which is a downturn across the board in viewing, and a reduced spend overall in content generation. I should have quoted some more studies, but the switch off is two fold: the internet, particularly among younger viewers is becoming the preferred outlet for video consumption, and secondly, the appeal of all content on television is diminishing. Reality TV is cheaper than producing sitcoms or dramas, they easily fill spaces in schedules, and they are popular with networks because the ROI is easier to achieve. 

 

Keep in mind as you read the data that a ratings points across seasons can’t actually be compared to viewers or even homes.  1 ratings point = 1% of the households, but in 1997, for example, 1 ratings point meant a lot more homes than it did in 1987 due to growth.  The numbers from the 1960s look impressive, but when you factor in the growth of households, the modern era isn’t quite as pitiful as it looks comparatively. 

2.5m switched off 06-08. Other stats show people spending less and less time watching TV, even when they aren't switching off completely, and this with the limitations of the alternatives. Despite some arguments raised by others today, I agree that you can't beat watching a big game on a big TV, and there isn't a straight switch there yet...but give it time. Two driving factors: kids don't seem to care as much about watching content on a big screen and as we see generational change this will accelerate the decline in broadcast television. Secondly, combine improving access to broadband with cheaper or already available internet content on TV in the next 5-10 years. Amazon TiVo, Apple TV, Sony Bravias...and many more to come. Cable's in on the act as well, I know I watched shows on Comcast last time I was there on demand. I should note, Cable is an interesting case, and I don't think they're doomed like I think network TV is doomed, but not because I think their product is great, but because I think at least some of them are smart enough to ride the wave as delivery changes. We're also seeing cable over IP now in a couple of places (AT&T is one example in some places). Hong Kong, some other places. 

 

BTW,  based on the best analysis we can do -- we don’t get nearly enough data from Nielsen to do detailed analysis -- it doesn’t appear that overall television viewing has dropped, but rather that what the broadcast networks have lost, have almost all been lost to cable TV channels (and often, but definitely not always lost to cable channels owned by the big broadcast networks) rather than  “I’m watching less TV”. 

The stats don't prove this, at least among younger viewers solidly. Kids are switching to the internet. Other stats suggest that the decline in TV time has coincided with the increase in internet time. Cable, in the United States at least, has most definitely picked up some of this viewing time, but as I noted above, even cable is slowly switching from a traditional push model to on demand, and even over IP. I don't count Cable as traditional TV

 

TV has not suffered like newspapers or the music recording industry, in fact, in terms of $$ it hasn’t been hit at all, overall advertising revenue across cable and broadcast is dramatically higher than it was 10 years ago, or even 5 years ago, and allegedly higher than last year and two years ago for the coming season at least in terms of primetime viewing.  None of this of course means you’ll wind up wrong.

Agreed, (well $ aside, the stats I've read would indicate that the ad spend on TV is declining, not as rapidly as the others though..and then there's inflation...). Which is why TV will fall first, and the hardest. It's why I've called it the tip of the iceberg. Newspapers have a substitute: the internet, blogs, online media outlets. Radio can be easily replaced with internet radio, Last.fm type services, and most significantly iPods, but what replaces broadcast television today. Nothing really compared to other outlets. Most homes don't have an Apple TV to watch content on demand, broadcast television has content locked up so that even when they try something like Hulu, you cant view that content easily on your TV. The other mediums are reacting: newspapers online, radio via consolidation and cost cutting, but broadcast television goes on pretty much like it has from day one. I don't know the date, or how long it will take (I'm guessing 10-20 years max), but when high speed internet access is in all homes, when devices that deliver content over the internet are in every home, being it by box or built into television sets, that the need for broadcast television ceases. There are two presumptions I make: one, that every home (or close there to) has access, and secondly that all content will be available online. Given cable companies are moving to internet delivery, and we see more and more legal content every day (although the TV industry continues to struggle with doing so) it's not an unreasonable presumption to make. We also know that where that content is not available, others make it happen illegally. BitTorrent offers everything on television now, and live sporting streams are really easy to find. 

 

While we may disagree on what media failed first and on some of the specifics there’s no denying that TV is in for a dramatic  upheaval.  No matter what happens, seems like people here in the states will Watch NFL Football on Sundays en masse, and if that’s the only thing they’re watching – the ad costs for that will be jacked up through the roof  and the advertisers will gladly pay it too.

The only way I see broadcast television networks surviving in the future is if they find a way to economically offer content online and on demand. It's not impossible, but even if they do find a way, they will eventually cease to be broadcast television providers. The same could be said for newspapers, but I believe the notion of "a newspaper" doesn't exclusively hold to a print edition any more. Maybe there needs to be a better term for that area of the media in the future. 

Re: sport. Yes, there will always be a market for football (although I'd note that view numbers there seem to be declining...that's a different debate), but that game isn't reliant on broadcast television. In the United Kingdom, Soccer was snapped up by the dominant pay TV company years ago, and now people pay to access that stream....it proves that you don't need broadcast television to watch a game on a big screen television. There is no reason why, when the technology exists and is cheaply available, that people won't be watching the big game via the internet, on a big screen television, at home with friends or at the local pub. I'm not arguing against collective group viewing habits, only that the medium does not have to be tied to broadcast television. 

 

It’s good times for sports tv in general as sports are the one thing that can stave off DVR viewing – people watch it live, which means more are prone to see the commercials.   In any case, sports will definitely keep TV from going away completely for a good, long while. 

The television viewing experience: yes. The delivery method: no :-) If people are watching a live stream of the same game, what makes you think that they will be able to fast forward or skip the ads either?