THE DEATH OF BROADCAST TV (PART II)

THE DEATH OF BROADCAST TV (PART II)

“Two hundred channels and nothing’s on!” Every heard anybody say these words or better yet, have you said it yourself? Well, that is where we are at today with the average cable TV subscriber paying for around 199 channels while only watching 15 of them. And guess what? Your cable bill continues to climb year after year – with the average cable bill in the US hovering around $98/month! Well, not for long…

THE RISE AND FALL OF BROADCAST TV

In my lifetime, I have seen the evolution of broadcast TV start with three major news channels and grow into cable and satellite with channel options well into the hundreds. What was once “free” with a good antenna now can cost what seems like a fortune compared to all of the other billions of options of “free content” people can consume online. And if you are in the broadcast TV business, the trends ahead are downright scary for you. For example, within the next 8 years, fully 50% of viewers age 32 and under indicate that they WILL NOT subscribe to a paid TV service.

But just when you thought things were getting bad, they are now getting worse for you. Why? Because people now DON’T WANT TO PAY for content (channel) bundles they don’t want to consume. For decades, most people had little choice and had to buy the bundles of 50+ channels because that was their only major options. Today, things are rapidly changing thanks to the smart TV.

 

 

 

THE NEW SMART WORLD OF TV

If you are a cable/satellite TV subscriber, I want you to stop for a minute and imagine a world where the TV shows you watch are based largely on your own viewing habits. For example, if you like the watch home shows, imagine a TV that now knows this and will intelligently suggest more home shows options you already like – without you having to surf around to discover them or having to record them when you can’t watch them. And imagine a TV where based on all of your most common viewing habits, you will then only have to pay for the channels and programs you actually watch and nothing more! And on top of all this imagine being able to pay to block all TV ads when you watch TV. And even if you don’t want to pay to prevent ads, at least they will be ads for products and services that are most likely to be of interest to you. Well, welcome to the past, present, and future of smart TV’s.

Many of these “imagines” are already in place or quickly evolving. Others are starting to take shape while the slow death of broadcast TV continues. Take your cable TV bundles for example. As recently reported in the WSJ, cable companies are now starting to ask questions that should have asked themselves years ago. More specifically; “what channels are people actually watching and which ones are even profitable?” Most businesses would have instinctively asked such a question long ago – unless you were ignorant and ripe for a technological disruption like broadcast TV now is. But they are not alone. Just ask the cab and hotel industries what they now think of Uber and AirBnB. But the problem may be solving itself since the growing majority of TV buyers indicate that they will be buying Smart TV’s moving forward.

THE DISRUPTION HAS ALREADY BEGUN

Whether people know it yet or not, phase one is underway: get the majority of people to replace their current TV’s with smart TV’s. And the more Smart TV’s are present in our homes, the more people will now discover the power of Hulu, Netflix, Sling TV, and all the great alternative options that exist to help them get to the one answer more Americans are asking themselves each day: “how can I now cut the chord with my cable or satellite TV provider?”

MEMO TO TV ADVERTISERS

Finally, if you are part of the $73 Billion annual TV advertising market in the US, you need to start preparing for the current and inevitable declines in TV reach you once relied on to sell your products and services to the masses. Much like the yellow pages, people will continue to find less utility for this advertising vehicle and you will be forced to now fish were the fish currently are. And don’t be fooled by those industries that try to keep your legacy ad spending claiming to be a gateway to never vehicles – for it is inherently against their core business foundation. Yellow pages tried do this by selling online directories alternatives to help account for their declining phone book circulations but in the end, their primary business and focus was always selling phone books first. Many people are now falling prey to TV advertisers now doing the same thing online.

No matter what TV stations and advertisers now tell you, they have one fundamental problem: they are fundamentally tied to their broadcast pipes. For example, if I own a TV station, I have to constantly fill the broadcast time with as many 15, 30, 60 second + TV ads I possibly can to pay for the licensing fees I pay as a fixed cost to broadcast content through that pipe – the more TV ads I can squeeze into that pipe, the more profit I can receive from my fixed costs to control that pipe. Anything I can sell outside of that pipe will be secondary to keeping my licensed pipe filled first. The yellow pages companies have the same inherent problem. So when you start looking at newer technologies such as social media in order to reach today’s evolving audience, be careful when a familiar old dog you know comes along trying to teach you a new cat trick.

If your business still relies on TV advertising to grow your business, contact us today to learn more about how to reach today’s growing number of digital consumers…

Save

Contact Dustin

I invite you to contact me directly for corporate speaking inquiries, and to schedule media appearances. Please expect a response within one business day. Thank you.