Henry Blodget wrote a pretty good piece about the TV business, comparing it to the collapse of newspapers. It’s well worth the read.
- Newspaper executives were skeptical about the threat that The Internet posed to their business model
- Revenue collapsed far faster than they expected
- Network TV is increasingly irrelevant in a DVR-shifting and omni-channel streaming world
- “The vast majority of money TV advertisers spend to reach our household (~$750 a year, ~$60/month) is wasted, because we rarely watch TV content with ads, and, when we do, we rarely watch the ads.”
- Human behavior is changing fast
What surprised me?
- Just how precipitous the collapse in newspaper advertising was.
- The importance of newspapers in facilitating local commerce – in particular, the role of classifieds (substitute: eBay, Craigslist), employment ads (Monster, then LinkedIn), and coupons (Groupon, RedFlagDeals) and how rapidly that unraveled.
What does it mean?
- If marketers use TV to drive awareness and digital to drive preference, what happens when normal TV collapses the same way that print collapses? (It isn’t a natural law, but it’s the dominant paradigm).
- The rising importance of live TV events as a way to increase effective reach and maintain some relevance with the 18-34 year olds. (50 plusers – it’s not that marketers don’t want you, it’s just that marketers already get you for ‘free’ when you watch what the 18-34 year olds watch.)
- Public opinion is likely to become harder to swing as partisans retreat deeper into their echo chambers and the independents, who are so important these days, retreat.
That old deal, where we got entertained over-the-air and advertisers subsidized the content in exchange for annoying us, has eroded. I think that, when we started really paying through the nose for cable (~1200/month), and realized just how little there was on, we really started finding other things to do.
TV isn’t going away. Radio still exists. It’s just going to transition into something. Whatever that is, it’ll have to redefine that deal between annoyers and consumers.
I’m Christopher Berry.
I tweet about analytics @cjpberry
I write at christopherberry.ca