20 Developments in 2016 Show TV Viewers are Being Lured Away
The demise of TV has been predicted since the rise of the internet and has only accelerated with the popularity of smart phones, however, have we finally reached a tipping point. Consider these developments:
Onslaught of options:
- Snapchat’s latest moves are making it look more like another TV disrupter than a social app as it announces that its Discover section will begin featuring original-scripted and reality-based video programming from Turner properties. Snapchat already gets 10 billion-plus daily video views and this past summer inked deals with NBC, ESPN and CNN to create shows for the app.
- Sling TV’s streaming service has about 600K subscribers, but that should grow as it adds new platforms such as Windows 10 (in September) and, ironically, Comcast’s X1.
- Netflix – not content with 47.5 million US streaming subscribers – updated its iOS and Android applications recently to add support for offline viewing.
- Hulu – has over 12 million subscribers. It’s up from 9 million subscribers last year, but its growth is slowing.
- Amazon Prime – there are an estimated 60 million Prime subscribers, so if just a percentage views content, it’s one of the larger streaming TV services (oh, and Amazon & Netflix received 17 Golden Globe nominations this year)
- FuboTV recently announced agreements with Fox Networks, NBCUniversal, A+E Networks, Crown Media Family Networks, Fuse Media, NBA TV and The Weather Channel.
OTT continues to help redefine what it means to “watch TV.”
For many 25 years old, for instance, “watching TV” is essentially a metaphor, since countless watch Internet-delivered content almost exclusively. Even MVPDs and Networks are joining the fun. [MVPDs is the cool new way to refer to cable and satellite companies.]
- AT&T’s DirecTV Now recent launch means there are now three solid streaming TV options with Hulu’s product expected sometime in the near future.
MVPDs and advertising are the two primary sources of revenue for networks. Live content is the #1 reason people pay for MVPDs, so traditional thinking has been to protect that source of revenue.
Sports and live events no longer magical armor?
The biggest beneficiary of the cable TV bundle, ESPN, which leveraged its ‘must have’ content for decades to negotiate ever higher rates with MVPDs, finds itself in the unfamiliar territory of losing millions of subs per year AND having surging content costs. ESPN has lost 9 million subscribers and lost 1.903 million subscribers in a single month. That should not only get the attention of Disney executives, but TV executives throughout the industry.
The streaming services recognize that fact and have been pursuing sports. The latest? Amazon is exploring an ambitious push to infiltrate that last bastion of MVPDs by adding a premium sports package option to its Prime service. The company has held talks for live game rights with leagues including NBA, MLB, NFL and MLS.
Et tu, Bravo?
Cable networks are trying to make up for losses in MVPD paid subscribers and to chase viewers (and, let’s be honest, to hedge their bets) by working with the new streaming TV services.
- NFL Network launches on PlayStation Vue – NFL RedZone Season Pass is also available on Sony’s TV service for cord cutters.
- ESPN says Sling TV is bringing in significant new viewers and they have had discussions with Apple.
- Disney confirmed that it’s building an ESPN-branded streaming package that broadcasts coverage of numerous sports but the service won’t have ESPN’s best content.
- Turner wants to sell streaming subscriptions to its channels, including TNT, CNN and Cartoon Planet, but that won’t happen soon, according to Turner CEO John Martin
- HBO refutes a report that HBO Now is struggling. CEO Jeff Bewkes said that the HBO Now subscriber numbers, which are hovering just over 1 million, may sound disappointing to some media, but not to HBO.
However, the threat is not just limited to alternatives.
The lifeblood of TV, advertising, is also being impacted. For example:
- Major advertiser, Nike, launches a new campaign ripping into TV and social media noting that ‘Time is Precious’ and wondering if you’re spending it wisely.
- WPP’s GroupM, a leading media investment group, is predicting that digital will continue to cannibalize TV ad dollars with 77 cents per new dollar going to digital while TV will get 17 cents. This is up from 72 cents for digital and a decrease from 21 cents for TV.
Perhaps this is why we’re seeing more mergers as companies are seeking ownership of both the Information and the Superhighway. Comcast purchased NBC Universal and now AT&T is purchasing Time Warner.
The AT&T/Time Warner merger is even more significant than the Comcast/NBC Universal one. This new company will control the signal to the wireless devices of 130+ million people, and to televisions in 25+ million households, a major movie studio and some of the most important cable channels in the country.
However, there is hope.
The TV industry has had a few wins recently.
- TV Everywhere hits 22 million. It took more than six years to reach 22 million households. Now it wants to triple that in the next two years.
- Disney, Time Warner & Fox this week won their bid to shut down a sanitized streaming service VidAngel.
- Netflix just canceled its second show in 3 months —and only its fourth cancellation ever, which means it’s a notable departure. The streaming company has given “Longmire” a sixth and final season. This comes on the heels of the cancellation of “Bloodline.” Of Netflix’s dozens of original series, only two have previously seen their runs end prematurely, and neither of those programs was nearly as high profile. “Ending an Emmy-nominated series with such prestigious auspices represents a turning point for a company whose story has, until now, been almost exclusively about adding things: subscribers, shows, awards.”
- Last year, Netflix and Amazon took home the most Golden Globe nominations beating out traditional winners such as HBO; however, this year HBO is once again on top.