When your competitors don’t care
“Whoever must play, cannot play.” - James Carse, Finite and Infinite Games
The future for TV networks isn’t looking bright. Meanwhile, there’s never been a better time to be making or watching TV series.
It’s tempting to map the road ahead for TV based on the experience of the music and print industries. But the challenge ahead for TV looks vastly different.
Audience declines are at the top of a slippery slope. A slope that print is already approaching the bottom of. In the US, viewership of the major cable networks is down 10% year on year. For 18-49 year olds, that number doubles to 20%. In Australia, 13-24 year old viewing dropped 15% from 2011 to 2014.
With a shrinking audience comes shrinking advertising revenue. Where TV may be different to previous versions of this story is that technology hasn’t just changed the rules of the game. It’s a completely different game.
When newspaper and magazine audiences shifted online, the newspaper and magazine content could shift online, and recoup at least some of the advertising revenue.
In TV the new competitors aren’t interested in advertising revenue. They’re realising it’s far easier to drive subscription revenue. For the TV networks, it’s hard to compete against someone who doesn’t actually see you as a competitor.
So what does TV become in the next few years? Expect at least a few of the following to come true:
- Netflix, Apple, Google and Amazon will dominate the premium content space, most likely leapfrogging the ‘99c song’ phase that music went through and instead ending up with viable (and potentially very profitable) subscription businesses
- Advertising around this premium content will disappear completely. Cost of sale just won’t justify the expense for the content provider, and programmatic won’t be attractive due to lack of quality control
- Video advertising investment will shift to time-critical content, with the most sought after spots being in sports (and potentially news, however this area of TV will arguably decline rapidly too)
- YouTube and Facebook will both become sports broadcasters - good news for advertisers as they will be able to buy highly targeted video advertising in high-reach events (the one area programmatic TV will become a reality)
- A generational shift in marketers who don’t need to see their own ads to know that they’re working, meaning the industry will finally see video investment dollars matching consumer attention
We’re entering an absolutely fascinating 5-year stretch for all forms of media right now. But no existing channel will change more than TV. Yes, we’ll still be staring a big screens every night. But the players, and the game itself, will be completely new.
- December 2015