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28

Nov

In mid-September, Viacom executives found what executives later called an “inexplicable” glitch in viewership for the company’s popular child-oriented cable network Nickelodeon: Nielsen posted a ratings decline ranging from 15% to 20%. “Children’s overall media use has actually increased but is split between TV, video games, computers, social networking, DVDs, music and other types of formats,” said T. Makana Chock, associate professor at Syracuse University’s S.I. Newhouse School. “They are also multitasking more frequently.”

Indeed, a January 2010 study from the Kaiser Family Foundation determined that viewership of regularly scheduled TV programming by children ages 8 to 18 had declined by 25 minutes a day—the time such usage had fallen since Kaiser first started studying those media habits in 1999. While the younger set continues to watch TV, more “is either prerecorded or watched on other platforms,” the report found.

It’s a big deal when an analyst as respected as Credit Suisse’s Stefan Anninger slashes his pay TV subscription forecast for 2012 to a 200,000 loss from a 250,000 gain, which is what he did this morning. But the rationale behind his decision is even more noteworthy: He cites a Credit Suisse-commissioned survey that found evidence of a youthful revolt against the pricey video packages. Lots of young adults aren’t cutting the cord; they never subscribe in the first place. Anninger says that while the evidence is still mostly anecdotal, “we are confident that a relationship exists” between high pay TV prices and declining subscriptions. And the growing group of “cord nevers” (as opposed to “cord cutters”) is “the biggest challenge pay TV will face over the next 10 years” after piracy and soaring programming costs — although “it does not feel like the industry is yet willing to admit that reality.

18

Oct

Much like human beings have become increasingly untethered, so too is television. With smartphones and iPads now promoting content where, when and how consumers want it, the trend is not being lost on television. According to the MediaPost news item, ABC Studies iPad: Redefines TV Viewing, “The iPad surely will play a role in accentuating that lesser connection to time and place going forward. ABC would have studied viewer usage of other tablets, but none had critical mass. That might change with the introduction of the new Kindle.”

The news item goes on to define three emerging TV viewing trends:

1. Micro-mobility. Consumers would like TV content on-demand, but not just from the comforts of their home… they want it from the beach and commute to work to their backyards and across multiple platforms.
2. Parallel Play. Your wife is watching American Pickers while you’re sitting there next to her watching an episode of Pawn Stars on your iPad. Parallel play is all about people in the same room watching different shows on different platforms.
3. Marathoning. If it weren’t for marathoning, I would have never been able to see Mad Men or Battlestar Galactica. Marathoning is when a viewer watches multiple episodes of the same show, one after the other.
Think about how television makes it money.

The promise to advertisers was all about the captive audience at a set time on a set date. Yes, the branding power has now been extended because people do use a DVR or download their shows from iTunes, but this changes the advertising model. On top of that, the ability to skip and fast-forward commercials has been the bane of television since the first VCRs were introduced. There is no doubt that brands and their media reps are getting smarter and better at capturing attention, but the format of TV advertising must adjust to this… much like it will have to adjust even more as these new trends in usage and consumption continue to evolve.

15

Jun

Why Content Isn’t King-How Netflix became America’s biggest video service

The other dirty little secret is that no one in the “traditional” media industry wanted to face the fact that the switch from analog to digital was destined to upend their business models. Reed Hastings, like Steve Jobs and Jeff Bezos, understood that superior service, smart packaging and details (the red envelope) breed customer loyalty. 


In fact, the dirty little secret of the media industry is that content aggregators, not content creators, have long been the overwhelming source of value creation. Well before Netflix was founded in 1997, cable channels that did little more than aggregate old movies, cartoons, or television shows boasted profit margins many times greater than those of the movie studios that had produced the creative content. It is no coincidence that although, say, 90 percent of the public discourse surrounding Comcast’s recent $30 billion acquisition of NBC Universal involved the Conan O’Brien drama or the shifting fortunes of Universal Pictures, in reality, 82 percent of the new company’s profits come in through the cable channels.