Taking in the annual cable industry conference the same week as the broadcast networks’ spring upfront ritual provided a stunning reminder of just how slowly television responds to feverishly-paced external change. More specifically: consumers’ full throttle embrace of mobile digital communications, content and commerce.
It is part resistance, part pragmatism (why change if we don’t have to?!). On its face, the broadcast network upfront occurred in a time warp; a rerun of upfronts past. President CEO Les Moonves, who has brilliantly lead CBS to eight consecutive season ratings wins, declared “the bloom is off the (digital) rose.” Behind all the pageantry was the far more intriguing ad time pricing sleight-of-hand and strategy aimed at reconciling their linear program schedules with evolving on-demand and streaming options. MoffetNathanson Senior Analyst Craig Moffett defends that, for now, networks “protecting the existing ecosystem is a better business model.” Okay. It’s a process.
But, “if it isn’t broke, don’t fix it” no longer is a feasible excuse for preserving the status quo. Mounting evidence that cord-cutting and over-the-top streaming are queued up to be the new normal has triggered a fixation with millennials who already have reinvented video viewing.
YouTube now claims to reach more age 18-to-49 consumers on mobile than any broadcast or cable TV network. The millennial prime time exodus has slashed some program audiences by one-third. And the ad dollars are following as underscored by Magna Global shifting $250 million of client money to YouTube’s Google Preferred over the next three years.
Given their fickle digital habits, new outreach to millennials is far from guaranteed but necessary now that they surpassed their Boomer parents as the largest living generation at about 75.4 million strong. But they consume and spend differently in exploding arenas of social media, messaging apps and streaming video which the TV networks, at best, consider marketing vehicles.
E.W. Scripps’ streaming video Newsy channel, Turner Entertainment Digital’s eclectic streaming Adult Swim, HBONow, Verizon and Hearst’s new streaming video channels are among those making new bids for anyone born between 1974 and 1995. Vox Media’s plan (backed by partial owner NBC Universal) to continuously move its digital content brands and premium advertising back and forth from Snapchat to Telemundo to SB Nation to A&E represents the consistent new mindset needed to grab and keep younger consumers. For the most part, TV Everywhere is really only still TV Somewhere. By comparison, the highly touted “skinny program bundle” is not so a selection of existing cable and broadcast network programs.
With the big shift underway and a dramatic schism in sight, the cable industry is looking for answers from the Internet crowd. But insights from invitees FanDuel, Mashable, Periscope, Twitch and other digital companies were limited to a handful of sessions during the rebranded INTX: Internet & Television Expo in Boston. The downsized exhibit floor largely reflected conventional program packaging for television extended to other devices and screens. Overall, the key takeaway: it’s still more about acknowledgement than adoption.
An obvious exception was Comcast’s highly-touted coverage of the Rio Olympics next month with a portfolio of live TV and streaming, on-demand archived options down to the narrowest sliver of athlete and athletic event viewing options. (It will be an ironic reminder to some of just how ahead of its time NBC and Cablevision were with their controversial Triplecast on-demand offering for the 1992 Barcelona Summer Games.)
Michael Powell, former FCC Chairman and now president of the National Cable & Telecommunications Assn., sounded the alarm over Washington’s “relentless regulatory assault” on TV players struggling with “the thundering Teutonic shifts” that make their unbundled content vulnerable to digital thieves.
But none of the digital challenges ahead are as insurmountable as the substantive loss of viewers and advertising dollars to come. This kind of disruption should breed opportunity (new ways of doing things) rather than just solutions designed to preserve the old ways. The television industry remains its own worst enemy.