Cable and media companies battle on as consumers turn away from television
Traditional broadcast television was once ubiquitous, but not anymore. Today, you’re more likely to be holding an iPad than the TV remote. Championed by Netflix, Amazon Prime, and sites like YouTube, on demand viewing has destroyed TV’s monopoly on video content. Consumers, particularly millennials, want to watch what they want, when they want. Technology has slowly eroded traditional viewing habits. VHS was disrupted by DVD, DVD was disrupted by Blu-ray and then discs were collectively displaced by online streaming sites. These trends are well established, but just how serious is the situation for cable companies and traditional media giants?
TV faces a channel of disruption
By 2021, PwC estimates that more than 81m US consumers will cut their cable cords, or simply never sign up for one. This represents a 64 per cent increase from last year. Neilson’s State of Traditional TV Viewing report found that Americans aged between 18 and 24 watched under two hours of traditional TV per day in 2017, evidencing ‘year over year decline’. In keeping with this trend, Deloitte predicts that 18 to 24 year olds will watch between 10 and 15 per cent less TV over the next two years. Perhaps controversially, Deloitte states that once these two years are up, the impact will be reduced. According to head of research Paul Lee, the distractions of social media, smartphones and streaming will ‘peak’. This remains to be seen, but from the above stats it’s clear that on demand, personalised mentalities are infiltrating entertainment. These changing habits have also affected cinema, although the quality of the big screen experience has protected it to some degree. The largest casualty is traditional television, to the point that its death seems inevitable. So, what’s the next scene in this sad sitcom? Has the curtain finally closed for traditional TV?
From commodity to antique
If the predictions of multiple organisations are correct, then the television set will become a little used relic of the pre-digital age. The decline of traditional TV and consequent increase in paid online content demonstrates that the subscription model is going strong. In response, media companies are likely to attempt expanding their power over on demand viewing. The influence of existing cable companies, however, pales in comparison to that of Silicon Valley’s tech giants – and they are now presenting a very real challenge. Last summer, Google, Apple and Facebook all began working on original content. Of course, on demand doesn’t necessarily mean legal, and it’s expected that laws will become stricter in terms of what people can and can’t watch online. Monitoring internet users is a touchy subject at best, but the conversation needs to be had if copyright works are to be protected. Fewer TV viewers, as well as the ease of reaching consumers via digital marketing, will continue to impact advertisers too. 2017 saw spending growth on digital ads surpass TV advertising for the first time. While this is worrying for ad firms that cling to television, it’s also an opportunity. Digital ads are easier to track, delivering important data about how many people view and engage with the content. Advertisers who shift to the digital model can gain deeper insights into consumer behaviour.
Consumers may not be watching less television, but they are certainly watching it on different screens. The decline of traditional television viewers shows that more people are moving into the digital sphere, and that digital advertising has become an incredibly effective way to connect with consumers. However, it would be unwise to dismiss TV as an enduringly powerful platform. Younger generations are certainly forgoing standard TV in favour of on demand, but this is not as pronounced in other age groups. TV’s gradual replacement is still a transition, not a takeover. Either way, tech company interest in production means that Hollywood is about to get very crowded indeed. Television isn’t dead yet.
Is traditional television experiencing a transition or a takeover? How else might cable companies attempt to extend their influence over on demand viewing? Could traditional TV make a comeback? Comment below with your thoughts and experiences.