(Viewing) Pattern Recognition

Television is a strange industry. For revenues, it relies mostly on data: How many eyeballs can be sold to the big ad spenders? And how many subscribers do really watch the shows? At the same time, they’re really big in data denial. So what if some younger generations do not watch as much TV? Duh. They’ll get older and grow into it. Probably a decade ago, a newspaper executive might have sounded alike. 

Last year, in it’s CROSS-PLATFORM REPORT Q4 2012, Nielsen stirred the industry with a startling revelation. There’s a growing number of Zero TV households, with cost (36%) and lack of interest (31%) being the main reasons for not turning on their TV sets (yes, 75% of all Zero TV households still own one. They just do not use it). Now, cable in the US is a scary thing. Time Warner Cable’s top tier DVR offer sets you back a whopping $79.99 per month (equipment, Internet services, and more than one premium TV service will be charged on top of that). 
To address those cost and lack of interest issues, the big MSOs introduced some stripped down starter packages, with some hot salsa on top. Time Warner Cable’s Starter TV with HBO gets you a rather strange package, for a meager (?) $29.99. To drive down the price, the offer is reduced to 20 TV channels, consisting of must carry broadcast channels like the four networks, PBS, and some hispanic stations. Plus CSPAN, the nonprofit TV covering governmental affairs network, and a plethora of home shopping channels. As this selection might just boost the lack of interest issues to a new top, you get some HBO as well.

I guess its Q3 2013 report will not have repercussions like that. Of the many mediums, radio remains a constant in our daily lives, the report states soothingly. So is this a path into a blessed TV future?  

Have a look at some numbers:

Getting old: look at the TV consumption patterns.

Getting old: look at those TV consumption patterns.

Turn it as you want: the traditional TV numbers look kind of scary. At least, if you’re in the TV business. Even if you leave out the teens (TV underachievers) and their grandparents (don’t know how to turn it off).
The potentially fully employed age brackets (meaning: not so much time to spare as granny and her millenial grandchildren) differ like this: if you’re 50 to 64 years old, there’s a 50% higher probability that your TV set is up and running than being in the 25-34 bracket. But if you really want to watch, 25-34 years bracket is definitely into video content. A bit less time shifting, but more DVD/Blu Ray, Internet video, and mobile video as well. 

So let’s really forget for now what might be happening with the dreaded millenials, and concentrate on those nice people who still want to watch a lot, but differently. First thing to notice: unlike their parent’s generation, they seem to treat TV a lot less like radio. Meaning: TV as a background noise is way down. Maybe, because it distracts you from watching those Youtube videos your friends are sending you. Maybe, because TV is just not a thing to do, anymore. I don’t know.

But those developments might have some serious repercussions. For decades, television acted like a huge black hole in the heart of an advertising universe, sucking in most of the funds, with a bit murky fundamentals backing everything up. But hey: how else to reach a whole nation of consumers? Of course, this changed a bit in the last couple years. But if people are watching less, sooner or later the ad base will become a bit more shaky. Just don’t expect spendings in a free fall anytime soon. Because, the “how else to reach a whole nation of consumers” still kind of works in favor of TV.

The real problem lies somewhere else. The global American TV Empire is built upon the subscriber fees of millions and millions of pay TV households. MTV, Nickelodeon, CNN, Cartoon Network, Discovery are global brands with financial roots anchored deeply in the existing US multichannel system. Consumers pay for packages they cannot unbundle. Don’t like sports, just documentations? You still have to pay for ESPN. Because there’s no way you can subscribe just to Discovery. 

Every couple of years, consumer advocates lament this world of packaged TV goods. The goal is cherry picking: take what you want, the rest you just do not pay for. And very time, big time research warns that a) everything will get far more expensive and b) most of the channels will not survive this attack on multichannel television. Which means: it might look nice, but in the end it’s really, really, reaaaally bad for consumers.

Well, time heal all wounds. And so what happens right now is a consumer unbundling of a different kind. Look at the DVDs, Internet video and mobile watching patterns. But, even more importantly: have a look at the rise of OTT on-demand services like Netflix – which is really a war on mass culture.


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