So Bert is trying to convince us that the days of linear appointment TV are
numbered...
That all TV will be viewed on demand, even if you are watching a live event.
If you watch something when it happens, it is either an appointment or chance.
Sounds a bit like an oxymoron.
The numbers in the 2014 Deloitt Digital Democracy Study tell us that less than
half of all TV viewing is appointment TV - i.e. Watching a linear channel when
a program is broadcast, or streamed by a MVPD.
Before theVCR all TV viewing was by appointment, or chance. It took about 40
years for half of the "live" audience to disappear. Where did it go?
Truth is, that they did not go very far. Even today, the vast majority of
programs that are being consumed via OTT services aired first on a broadcast
network, a cable network, or in a movie theater. A handful of companies created
these programs and are enjoying a short term boost to their bottom lines
selling the rights to these shows to the upstart OTT services.
But it is clear that consumers have had enough. The oligopolies have pushed the
envelope in every way imaginable:
* Commercial loads are at an all time high - and when ratings decline the
typical reaction is to add more commercials to maintain revenues. This is a not
sustainable; it typically signals the beginning of a death spiral.
* The cost of a MVPD bundle has doubled in the past two decades, fueled by the
addition of dozens, if not hundreds, of channels we don't watch. The Deloitt
study did show consistency in one stat - the typical viewer watches only 10-12
linear channels, although in a home with kids this could be 30 or more channels
that are being viewed.
* The cost of rights for live sports has skyrocketed, as the content
oligopolies often pay more for a franchise than they can recoup selling ads in
the live programming.
* Likewise, the cost to produce scripted programming has skyrocketed as a
limited talent pool, and their agents, take advantage of the largesse.
* To keep linear TV "viable," program schedules are filled with tons of lower
cost crap.
Meanwhile, options for the consumer are proliferating. The days of getting in a
car to go rent or buy a movie, or a season of TV shows are over. Just about
everything is available for download or streaming, for sale or rent. And SVOD
services like Netflix and Amazon prime are burning up Internet bits, satisfying
the binge feeders and those who just want to avoid commercials.
So does all this add up to the death of linear appointment TV?
Bert thinks so.
I do not.
I believe that the percentage of viewing "live TV" will continue to decline;
but most of the bad news is already baked in, as the financial analysts like to
say. Clearly the number of linear channels offered by the MVPDs is about to
tumble - the "rerun channels" are no longer needed, their role having been
largely replaced by VOD.
But core networks with the financial resources to obtain exclusive rights to
live events will survive, along with those who offer news and analysis. And a
small but economically meaningful portion of the audience will watch the first
broadcast of a program.
Regards
Craig
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