Television in 2015: For What It’s Worth

“It has to start somewhere It has to start sometime…..What better place than here, what better time than now?” — RAGE AGAINST THE MACHINE

While many had predicted 2014 to be the year that the Television Industrial Complex imploded, very little actually happened in that regard. But just two weeks into 2015… BOOM!!! We can feel the girders of power beginning to crumble as the television ecosystem as we know it begins a tectonic shift.

RATM’s rallying cry is for the new generation, the Zapatistas in all of us, to rise up and take control of the radio waves and drive the revolution. We’re in the middle of a radical shift in thinking about TV, the airwaves, fandom, broadband and content control and access paradigms…it’s happening EVERYWHERE. This is not a revolution from the inside, an ascension of the next generation. It’s a complete reconceptualization of the entire industry from the ground up.

Many different factors, affecting all parts of the industry are at play here. This ain’t no game of checkers “KING ME” think of it more as going toe to toe in chess with Bobby Fischer, lots of little Bobby Fischers, one after another. Here are a few of the matches that we see playing out:

Just this week, President Obama announced a plan to try and break the monopoly the cable companies have had over broadband, a move that would bring new options for streaming services, opening the door to greater innovation on all fronts. If only it were that simple.

There was a new attendee at this year’s CES and that was SlingTV, the very first Virtual MVPD. For just $20 a month, Sling makes this idea of tv everywhere truly come to life, offering viewers a web-only TV package that will surely open the door for others to challenge the tyranny of the bundle, giving consumers more options and dramatically altering the business model of pay TV.

Dish CEO, Joe Clayton explained that Sling TV is a “complementary service, not a supplementary service” aimed at the consumer the satellite provider hasn’t been able to sign on. So what? Well for one, ESPN. Viewers will no longer need a traditional cable package to watch the sports network. How many people are willing to dish out $20 bucks for ESPN ? TBD, but it’s a start and a major hurdle cleared for the “I’m on the fence about being a cord cutter, gotta have my sports” people that are contemplating the move.

There’s a PLATFORM arms race happening here: We also have the dramatic rise of online-video content. This year, domestic digital video advertising will reach an all-time high of $7.7 billion, a 30.4% increase over 2014. While YouTube has certainly provided a challenge to traditional TV networks, competitors are rising up to take on YouTube, notably a well-funded start-up called Vessel, which aims to steal some of YouTube’s thunder… and its stars. Another major announcement came just yesterday as Maker Studios, the power house MCN built on YouTube’s foundation, announced a deal with Vimeo. The rapid rise of MCNs — and their powerful hold on millennials is rocking the entertainment industry as everyone from studios to talent to brand advertisers struggles to get a handle on how to handle this rapidly evolving beast. Will it be ad supported, will it be subscription, How many subscription services will one person pay for, do I really want to auth into 7 different streaming apps, wait, why are there ads in my paid subscription service???? ARGHHHH!!!

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And there’s a TALENT and PRODUCT arms race going down: This year’s Golden Globe Awards confirmed that subscription services, be they on traditional cable like HBO and Showtime, or streaming, like Amazon and Netflix, have created a new home for the second Golden Age of Television, hosting the sorts of shows and fostering the types of performances that may not draw huge ratings, but have impact way beyond their reach. This points to the “Art form” of storytelling entering a rapid ascension, and the Modern Medici coat of arms being littered with never ending logos from the likes of Amazon, Netflix, GoPro, CBS and NBCU to Red Bull, GE and many many more to come.

And Paranoia strikes deep: We’re also witnessing a sweeping plunge in live viewing, and the networks are quickly pivoting to keep up with the times. NBC’s head of research, Alan Wurtzel, opened the TVOT conference with a slide that showed that Prime Entertainment Time Shifted viewing for Q4 live linear viewing has slid to around 60% while noting that DVR Playback is not only largest primetime “network,” it’s four times larger than the other four major broadcast networks combined. So? Well, NBCU rolled out two major announcements this week, one touting their Cross Platform Audience Targeting capabilities, enabling ad buyers to buy seamlessly across their portfolio to target the right audience on the right platform at the right time; and the other announcing the entire NBCU Cable group moving from reporting Live + Same Day numbers to Live+3 Day numbers. The Cable group includes major networks such as Bravo, Syfy and even the #1 scripted channel, USA Network. This is another major signal that the only way to keep touting strong Audience engagement numbers is to actually change your reporting windows to include ALL places, platforms and times your audience is viewing. This shift in viewing habits is having a profound effect on advertising, programming, measurement and audience engagement & retention.

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These are just some of the seismic changes that are happening right now. Over the coming weeks, we’ll be looking at these changes and what they mean for networks, for advertisers, for producers, for social platforms and most importantly, for the audience at home. We’ll examine why and how they happened, who the key players are, what to look out for and how long it will be before the current structure collapses.
We Better Stop, Hey what’s that sound, everybody look what’s going down…Viva la Revolucion!