Rebecca Greenfield collates a bunch of commentary about the slowing growth — almost non-growth — of TV subscriptions in the US. Around 400,000 Americans cut the cord last quarter, but cord-cutters aren’t the trend to watch: it’s cord-nevers.

Rebecca Greenfield via the Atlantic Wire

Cord-never numbers are particularly hard to measure. A cable company, of course, can’t report the amount of people who never subscribed to them in the first place, but we can do some piecing together to get an idea of the changing trends. U.S. census data found that 1.8 million new households were formed, but that only 16.9 percent of those signed up for pay-TV services, according to Ad Age’s Dan Hirschorn. The TV industry has been flat for years; U.S. households continue to rise. Meanwhile, as cable subscription rates have stayed flat, Internet subscriptions are on the rise. Comcast added 156,000 net broadband subscribers, an 8.4% increase; Time Warner added 59,000 residential high-speed Internet subscribers. While something like 100 million U.S. households subscribe to TV services, the U.S. 2010 census data had 120 million households with Internet — those numbers have only risen since then, with these companies reporting increased subscriptions. And what do people do on the Internet? Watch things. Though the most popular Internet activity, as of 2010, was social networking, video saw a 12 percent increase, according to a Neilsen report. Though, those numbers include people with cable.

These cord-never numbers matter more than the cable-cutters because the people who tend to not ever sign up for cable are young — and the youth is the future. Americans ages 12 to 34 are spending less time in front of the TV, found another Neilsen study. As of February 2012, for three quarters in a row, there have been declines in viewing among Americans under 35, The New York Times’ Brian Stelter reports. He attributes this decline to a shift to streaming. “Young people are still watching the same shows, but they are streaming them on computers and phones,” he writes. Right now the cable industry has maintained stable subscription rates because of an elderly population that’s watching television more, adds Stelter. But, those people won’t be around to change the future. The broke twenty-somethings who survive off of Hulu, Netflix, bootleg streams of their favorite shows, and stealing each others’ HBO Go passwords now, might get used to a life without paying for cable, causing a generational shift in the way Americans consume things. That’s what the cable companies should worry about. 

And some people are simply watching less of the mass-marketing oriented Hollywood mumbo jumbo, and doing other things. 

I expect a revolution in what we call TV, and it will emerge from the rise of the second screen, and the separation of advertising revenue from broadcasting (see Social TV and The Second Screen). Imagine if Twitter built a variant of its tool that was geared to a richer social experience around TV. And imagine that millions of people watching the NBA playoffs are using that app to socially experience the playoffs, running the game on the dumb box in the corner and the Twitter app on the iPad or iPhone or laptop. And imagine that Nike decides to pay Twitter for ads on the second screen. How will the NBA or ESPN respond? What law is being broken?

This is like cord-cutting, metaphorically. It’s cutting the link between advertising dollars and the ‘owners’ of the TV products.

So the revolution comes when the networks and the cable companies loose a large slice of their ad revenues. It will be just like the newspapers losing the classified business to Craigslist. 

On the other side of that collapse will be new TV, but first it will all fall to bits. And then I will finally be able to buy access to a single NBA playoff game, or just the Women’s Beach Volley Ball at the Olympics, or just Game Of Thrones from HBO, because the natural unit of TV is a show, an episode, a game, just like the natural unit of music is a song, as iTunes proved.

6 August 2012 37 underpaidgenius Permalink

Cable providers starting to act like cell phone networks: metering bandwidth and usage. What will the Justice department do?

26 June 2012 10 Permalink

We have officially passed peak TV:

Tess Stynes via WSJ

Global television shipments fell 8% in the first quarter from a year earlier, as LCD-TV volume posted its first year-over-year drop, according to research firm NPD Group.

LCD TV shipments fell 3% to 43.1 million units from a year earlier and were down by a third quarter-to-quarter. World-wide TV shipments fell 32% from the fourth quarter to 51.2 million.

As TV becomes absorbed as ‘just another sort of media’ by the Web it is being transformed into New TV. New TV is about a swarm of devices — smartphone, tablet, PC, dumb display, but not just a dumb TV in the corner.

Demand for gigantic monitors will decrease — except for the older demographics — because people aren’t just using TV in the living room: it’s wherever they are, using whatever displays that are available. And the payback on a 50 inch bulb decreases if you are watching in bed, on the train, in the bathtub, at a friend’s house.

The WSJ piece makes no effort to thread these numbers into some larger societal trend, which is a shame.

21 June 2012 3 Permalink

The FCC is likely to let the genii out of th bottle, and redefine who is a Multichannel Video Programming Distributor, or MVPDs, now effectively limited to the linear TV players like Comcast and DirecTV. If the rules are changed to include streaming video services like Hulu and YouTube, the landscape of TV will never be the same:

Brian Stelter via NYTimes.com

Major distributors like Comcast and Time Warner Cable want the definition of M.V.P.D. to remain rather narrow, to include only those who provide the transmission path for programming, like themselves.

Some broadcasters, however, want the definition to be broadened to include online video sites, because then the sites would be subject to the same rules as cable operators, called retransmission consent, and would have to pay fees for their station signals. A number of online TV start-ups, including the Barry Diller-backed Aereo, are trying to sidestep these rules.

Jack Perry of Syncbak, which helps stations simulcast their signals on the Web, said his company would be able to grow more rapidly if the F.C.C. adopted a “21st-century definition of M.V.P.D.’s.”

“The impact could be huge,” he said. Still other stakeholders, including trade groups that represent giants like Google, Microsoft, Amazon and Netflix, have said that the F.C.C. should take more time before deciding.

Yeah, some large players want to avoid paying fees for rebroadcasting, and to possibly limit the entrance of new start-ups.

And the cable and satellite operators want to freeze time, and delay the inevitable, which will turn those companies’ product into a single commodity: basically bringing the Internet to our homes, through which we will be able to access whatever streaming content we want from whatever sources we want: ‘over the top’ TV. Comcast and Time Warner Cable do not want to be competing directly with Apple, Amazon, and Google, but it is in the best interest of the average person is the FCC allows this change to happen.

23 May 2012 2 Permalink

Michael DeGusta via Technology Review

[…] smart phones, after a relatively fast start, have also outpaced nearly any comparable technology in the leap to mainstream use. It took landline telephones about 45 years to get from 5 percent to 50 percent penetration among U.S. households, and mobile phones took around seven years to reach a similar proportion of consumers. Smart phones have gone from 5 percent to 40 percent in about four years, despite a recession. In the comparison shown, the only technology that moved as quickly to the U.S. mainstream was television between 1950 and 1953.

Almost as fast as TV, which was artificially delayed by WWII.

21 May 2012 13 underpaidgenius Permalink

TV advertising is up, but it’s a Ponzi scheme, like the increased revenue in movie theaters: in both cases, they are losing viewers but charging more.

David Carr via NYTimes.com

According to estimates reported by Reuters, in the coming week the big four broadcast networks and the CW will book some $9 billion in advertising revenue, with the big four up 2 to 4 percent from last year. And cable networks, which surpassed broadcasters for the first time last year in total advertising booked during the upfronts, are expecting a payday of more than $9.6 billion, an increase of 4 to 6 percent.

Part of what keeps legacy television in the game is that it is the last refuge of mass and reach. For retailers who want to flag a sale or an entertainment company with a weekend movie opening, a commercial on a broadcast network or a highly rated cable station can still hammer a message into a lot of noggins. In this targeted age, it’s breathtakingly inefficient — you pay to reach everyone, even the millions not in the desired age group — but making a big television buy is a kind of comfort food, easy and familiar.

Yet by losing audience, networks and cable stations have been able to force advertisers to buy more commercials to reach the number of viewers that they want.

“They have an interesting business model predicated on losing viewers,” observed Brad Adgate, the senior vice president for research at Horizon Media. “It can’t last forever.”

At some point, the laws of both gravity and economics will begin to pull down the upfronts, and with them, the fundamentals of the television business. Jeff Gaspin, who used to head entertainment at NBC, told Bill Carter that he and his son recently decided to catch up on a particular series and so assembled episodes from a variety of sources — iTunes, Netflix and the DVR. They saw all the past episodes in time to watch the final one live on AMC but found that commercials interrupted their experience.

So what show demonstrated to the former television executive that the old way of watching television was losing relevance?

“The Walking Dead.”

14 May 2012 20 Permalink

OgilvyOne London: “As an ad agency, we’ll always be trying to lean forward” - Emma Gardner via Lean Back 2.0

Has OgilvyOne London seen any evidence of people “leaning back” when consuming ads or creative content on their iPad?

[OlgivyOne London Chief Executive Annette] KING: It’s interesting because we were having a debate between lean forward and lean back before we got on the call with you. There’s a time and a place for both. The Economist app is a good example of a ‘lean back and consume’ type of situation. As an ad agency, though, we’ll always be trying to lean forward. We’re always trying to get people to take part in the app and engage with the ad. By definition, it’s an immersive kind of approach.

We’re really interested in the dual screen experience right now. By dual screen, I mean sitting in front of the TV with a tablet. You might be watching one thing on the TV, but doing something else on your tablet. And we want to start connecting those two things. If Jamie Oliver is making a special truffle recipe on television, you can use your tablet to find out where truffles grow in the world, or how to make Jamie’s recipe. You can get people involved through the second screen.

I wonder about ‘always trying to lean forward’: isn’t there a place for ambient advertising? Ambient awareness of other people (through Twitter or other social tools) is a back of the mind sort of attention scheme: you know what people are up to based on their updates moving by while you are doing other things.

I conjecture that ambient advertising could be very effective on the second screen. Imagine that as I am watching a cooking show, and I’ve enabled a second screen gear applet on my tablet. As the chef’s use various kitchen tools, the gear applet streams pictures and descriptions of the gear: this knife, this sauce pan, this stove. You might think that this is a lean-forward set up — that I am dedicating foreground attention to the gear streaming by — and I might do that the first few times I use the app. However, as I habituate to the app, I will begin to treat it as a lean-back stream of information, so my perception of the products being featured is more additive or cumulative. It’s just as much about brand building as a call to action.

Yes, there will still be times when I want to buy that particular knife, right now. But in general I think it will lead to a collection of brand associations built over time, so that when I get to the point when I want to buy a new knife, a few brands are in my head, and I choose between them at the store, or online.

If there is one thing that advertisers can do, though, to make lean-forward intimacy with products more likely on the second screen, it would be to make it easy to share product information and images with other people: wire it deeply into the social dimension of TV.

(For more on Social TV and The Second Screen, download the free Work Talk special report on that subject, here.)

7 May 2012 13 Permalink