Redefining Television and News – The New Age of Global Media Changes all the Rules
July 23, 2009 Leave a comment
Over the years I have learned as much hanging around the office coffee pot as I have learned in most formal adult and professional education courses. The coffee pot and break room is a place where anybody in the office can mingle in a neutral location, and talk about almost anything that enters their mind, as long as the topic remains mostly appropriate to the surroundings.
Recently we’ve talked a lot about television. Whether it is ripping the media circus surrounding Michael Jackson, the death of Walter Cronkite, or the last episode of “I Love Lucy” playing on the “Archive Channel,” everybody has an opinion on what television is, was, and should be.
Television has changed a lot over the past few years. Much like print news media, which has always heavily depended on advertising to both define the layouts of press – as well as subsidize and make the actual money for news papers (subscriptions have never made any money for the press), television has traditionally segmented programming around advertising.
With cable television and premium channels, advertising is being reduced as a percentage of television revenues. Add on-demand utilities such as Hulu, and subscription entertainment services make online or entertainment-based advertising even less relevant. And this could redefine how we look at broadcast television.
In the old days, before cable TV, the Internet, and satellite access, most markets had the choice of 5 or 6 broadcast television stations to provide both news and entertainment. Advertisers could expect individual networks and stations would give them a relatively high percentage of available eyeballs for their advertising segments, and most people had few, if any, alternatives to watching broadcast television at night.
Now, with 350 cable TV stations, the addressable market remains the same, but the percentage of available market for each individual station as a small fraction of the good old days prior to cable. This means advertisers must seriously consider the value of advertising they allocate to individual broadcast stations, and make a decision if this is in fact the best use of their marketing dollars.
If we add the television stations available through the Internet, the number of available channels goes into the thousands.
To put this in perspective, on June 12th the Television Bureau of Advertising released a study showing that in the first quarter of 2009 ad revenues had declined by 11.9% compared to the first quarter of 2008. Even more stark numbers were attributed to local programming ad revenues, which overall in the US declined by 27.6% The report further drills down into industry segments, such as the automotive industry, telecommunications, and entertainment (restaurants, etc).
The only bright spot, sort of, in the study was with syndicated programming, which attracted a slight increase in advertising revenue. Syndicated television such as you would find on Hulu.Com…
This does not bode very well for local broadcast television. If the addressable eyeballs remain the same or are growing, but the “connectible” segment of eyeball is rapidly declining, then the television business may start running lean on cash. In addition, local broadcast television traditional had a very broad range of viewers, allowing nearly any kind of advertising to have some level of success or acceptance.
With cable television and online access to syndicated programming and real time programming, advertising must be carefully planned to meet specific niches of viewers – not to mention the need to ensure their end user is not on a subscription-only media/channel.
Now I do watch a lot of on-demand programming. I try to catch the Daily Show in the morning, as I do not have time to normally watch in the evenings. I do not mind waiting 15 or 20 seconds while an advertising message spools through prior to the show. Most online syndicators of television programming (or more accurately media and entertainment programming) do have a pre-message to sit through prior to the download or stream. I have never heard a complaint about this, particularly if you are watching a free source of syndicated or streaming media.
The bad part in all this…
Without advertising to pay for local newspapers and broadcast media, it is natural the quality of local news will degrade. We may still have great sources of national and international news provided by big guys like AP and Reuters, but if you crave that story about the police beat in Huntington Beach, or activities in Chatsworth, you may not get either the quality or information you need. Get ready for a one paragraph segment on the State of California provided on Page 4 of USA Today.
Broadcast television and newspapers will try to fight back and keep the eyes and minds of their remaining viewer and reader base. They will offer advertising and viewer incentives, but the battle will be tough, as Netflix, YouTube, Hulu, Pandora, and dozens of other content providers continue using the Internet and on-demand media to distribute their goods.
The end result is not clear, other than us consumers will still have access to quality content. We can easily filter home cat videos on YouTube out of our daily viewing cache, and concentrate on libraries and archives of quality movies, syndicated serials, and new content that will continue to emerge.
I hope newspapers do not go away, however I am ready if they do. I only watch KTLA (CW-5 in LA) in the morning because it amuses me to see the antics of their performers (oops, I mean newscasters). I do not watch broadcast television at night unless it is a Dodgers game. Or if I want to get the current status or condition of wildfires in LA County and our surrounding areas. Heck, maybe there is a need for local broadcast television!
We are entering a new phase of news and entertainment
John Savageau, Long Beach