Viewership Trends in Digital Era: Is the TV Business Starting to Collapse?
By Dennis Kuba
June 5, 2012
June 5, 2012
Henry Blodget, CEO and editor-in-chief of Business Insider, describes how dramatically television viewing has changed over the past five years.- He notes that television shows are commonly recorded and viewed later. Ads are typically not watched except during live sports. With Netflix, iTunes or HBO, ads have become “intrusions.”
- Other than sports, the only other time many consumers watch live TV is for news events. Additionally, consumers are increasingly watching TV on various devices including laptops, smartphones and iPads.
- Blodget lists some implications of these trends: 1) TV advertisers are wasting their money since we don’t watch the ads, and 2) Cable subscribers are wasting their money since they are paying for live TV that is rarely watched. Most programs are available on iTunes, Netflix, Hulu, and Amazon.
- How will this impact the traditional TV business? Blodget suggests that networks will be replaced by libraries of content from Netflix, iTunes, and uber-networks like NBCUniversal and Time Warner. These are also more efficient for content production, acquisition, and distribution.
- Viewers may figure out other ways to get their sports and stop paying the $100/month for cable TV. They will eventually see no distinction between TV and other forms of video content. And cable providers may stop paying affiliate fees to networks.
- Like the newspaper business before it, the TV business is destined to become more efficient due to these changes in viewer behavior. The change may already be taking place, as cable TV ratings are dropping.
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