Is Decline of Broadcast TV to Blame for High Cable Bills?

Traditional television viewing continues its decline, according to new charts published by Morgan Stanley analyst Benjamin Swinburne and his team. The charts show the “long, slow decline of old-fashioned broadcast and cable TV, and the number of ad dollars chasing the dinosaur medium,” writes Business Insider. According to the numbers, there has been a 50 percent decline in broadcast TV audience ratings since 2002.

Swinburne points out that even amidst the obvious decline, ad dollars are still directed toward the general TV audience because its size is still substantial — even as it dwindles. “It’s a classic ‘supply vs. demand’ issue: as the number of big, unfragmented audiences declines, they become more valuable,” notes Business Insider.

But even so, TV companies have begun to rely more on subscription revenue rather than ad revenue. “The result is that the TV business is financially healthy — even as fewer people pay more to watch it,” according to the article.

The post includes Morgan Stanley charts that suggest the following: 1) Time-shifted and online viewing continues to grow, but live TV remains the primary way we consume video (pictured above); 2) the broadcast networks have historically been resilient amidst declining ratings; 3) advertiser demand for TV has led to pricing growing faster than ratings have declined; and 4) TV revenue is becoming less cyclical as share of subscription fees increase.

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