Is TV Dying?
Join us for “Tea Time”. We are discussing the decline of traditional television and the rise of the attention economy; how ABC lost Shonda Rhimes to Netflix; where business owners should be looking for their target customers in a fragmented digital landscape; the Verzuz phenomenon; Triller vs. Tik-Tok, and influencer-powered advertising.
Shimite: What kind of tea are we drinking today?
Chinedu: So the tea that I have is Calendula. Yeah, I’m a tea aficionado.
Shimite: You are a tea connoisseur, okay! Say it again?
Chinedu: Calendula…So technically it’s not a tea. It’s a Tisane [mispronounces]. I think that’s what it’s called which is when it’s a leaf that is not a black leaf. Black leaves are teas, the others are not.
Shimite: Okay, I don’t know what you’re talking about!
[intro music playing]
Shimite: Welcome to Tea Time with the Suites. The Suites is an exclusive business community for executives and entrepreneurs of color who are navigating the C-suite and looking for strategic connections and resources to scale their businesses. My name is Shimite Obialo, founder of the Suites and host of Tea Time. I’m a corporate finance attorney, business advisor and entrepreneur and for the last seven years I’ve worked with U.S. based businesses at corporate firms in New York City helping businesses to scale all the way from seed stage to a sale, or even an IPO exit.
I’m so excited to be introducing to you Tea Time a conversational series where I invite guest speakers investors, executives and thought leaders to opine on recent business news and the implications for entrepreneurs and business executives.
And for our first episode I am thrilled and privileged to be welcoming my good friend Chinedu Enekwe. Chinedu is co-managing partner of Aux21 Capital, a $50 million dollar seed fund investing in the future of commerce for the next generation of Internet users. He’s got seven years of experience in venture capital and he’s invested in leading companies like Lyft, Koji and Emerge. Welcome Chinedu!
Chinedu: Thank you for having me Shimite! How are you?
Shimite: I’m good. I’m good. I was reading about a phenomenon that was occurring in 2020. And that is the rapid decline of viewership of traditional television or linear television as they say and what follows from that is, of course a decrease in advertising. Except for cable news networks, which all saw a big boost in audiences during the Presidential election every major broadcast network and most cable channels suffered major ratings declines. According to Nielsen, CBS, which is the top network saw a 21 percent decline in viewers and TV advertising by extension decreased 15% in 2020. Compare that to 2019 where it dropped just 2.5 percent.
As a personal anecdote, I don’t subscribe to any cable network and I can’t remember the last….I think going to my parents house is the only time that I’m actually watching traditional TV.
Chinedu: So you are a “cord cutter”.
Shimite: Exactly!
Chinedu: You’re the cord cutter everyone’s been chasing. So you are that demo.
Shimite: I mean, I don’t even say I’m a cord cutter because when I moved out of my parents home and I started actually like watching TV and you know, subscribing to things on my own I got an Apple TV, so I never really had cable to begin with. Yeah, and I think that’s a lot of Millennials. That’s the trend for a lot of Millennials. You know, I mean terms of this concept of cord-cutting 6 million people cut the cord in 2020. And so that reduced the number of cable subscriptions to about 77 million. I don’t know if that’s something that resonates with you.
Chinedu: It is — it’s actually very dramatic in terms of what people are signaling. But I guess it’s one of those things where it’s long overdue for people who are watching the space right because all the components have been there and Covid-19 has been an accelerator of existing trends.
Shimite: So I was thinking about some of the specific reasons why we saw the decline that we did with TV viewership in 2020, you know live sports…sports viewers are least likely to cut the cord and yet we saw such dramatic decrease in viewership for live sports. Why was that?
Chinedu: Live sports is an extension of the live experience. Right. So we saw less people actually going to the games or participating because the crowd reduction for Covid-19 which then meant they were less bars being open. So a lot of the viewership of live sports happens not inside the home. It happens outside. So once you take away the social element of sports, that’s really the effect. I believe we saw
Shimite: My boyfriend, I noticed that I would see him watching YouTube and watching like NBA games on YouTube or he would be watching Sports Center recaps of games. So even with him who’s like a really big sports fan, I think he found that he was willing to forgo, you know, some of the fullsome content you’re getting through, you know watching on cable with sort of getting the highlights on the streaming platforms.
Chinedu: It’s a hundred percent true. I remember being a teenager I would wake up in morning and watch Sports Center and the packages they recycle similar to you know short segments maybe 8 24 minute segments and then they would do it all over again but I would stay and watch the segment over and over again but I don’t have to do that anymore. I could just go to YouTube watch Shannon Sharpe give break down and go crazy or watch Stephen A shout at the top of his lungs.
Shimite: I mean half those people you named I have no idea who they are. I don’t really watch Sports. but I do watch a lot of drama, scripted TV. And for me, I am a huge fan of Netflix. The realities of the original programming that they were pumping out. I think is another testament as to why people have shifted away from the linear traditional TV. They’re just not creating the same level of content and certainly in 2020. You just didn’t see that because a lot of the studios shut down and they didn’t have that same backlog. That portfolio of content available.
Chinedu: From a television watcher, content consumer perspective, Netflix is giving you all the “feels”, right?
Shimite: I’m a fan of the Bridgerton’s myself.
Chinedu: Yeah. I saw that and I said, You know their deal with Shondaland
Shimite: Mmm
Chinedu: You know, so I couldn’t look at the series and not think of how the scoop of ABC losing Shonda Rhimes to Netflix.
Shimite: Yes.
Chinedu: It was a depiction of this the power shift away from linear TV to the streaming platforms. Yeah with Shonda Rhimes having delivered some of the most profitable content for the last decade for television
Shimite: Private Practice, How to Get Away with Murder, Scandal. She is prolific.
Chinedu: Yep. prolific. And so when I was watching that all I could think of was wow the power has shifted when the best writers, content producers are seeking a Netflix deal rather than going on broadcast television and broadcast television for you know for the life of television has been the Holy Grail.
Shimite: So what I’d like to understand is what are the major trends? I mean, I think we’ve talked around it. But what are the major trends in terms of you know where people are looking and watching and by extension where business owners advertisers, brands, should be directing their money toward.
Chinedu: The major trend that we saw last year that has been building over time as a trojan horse is the connected TV. Televisions are now connected to the internet and by and large that it will be the trend for the next ten years.
Shimite: So that’s Apple TV, Roku, Amazon Fire Stick.
Chinedu: All of those devices that allow us to essentially watch TV or stream content looking at a big TV screen and I think this speaks to something that you mentioned to me before that technology continues to evolve and what has happened is that content producers keep on looking for different mediums that are different technology platforms that can distribute their content to their audience. That’s a very big trend and then an overarching trend we’re seeing here is people’s attention are migrating to multiple screens. So not just the television screen. You have the phone screen. You have the laptop screen, you have the iPad screen.
We saw last year a company called Quibi trying to take advantage of the phone screen which was you know a billion dollar effort in terms of content and product. Well what really won out the day, that’s the one everyone’s lips is TikTok. The kind of attention grabbing content that MTV provided is what TikTok is providing and all the TikTok clones that have emerged across the social media ecosystem.
Spotlight which is Snap’s version or Reels which is Instagram’s version or Facebook’s version, and all of these platforms form this kind of attention economy around television or screens, but I think one of the most compelling applications of this new attention economy has been Verzuz which was like a cultural phenomenon where two producers of music just played their portfolio of music against each other to the point where it became an actual performance and concert level you started seeing Oprah enter the chat.
Shimite: Oh really?
Chinedu: Yeah, Michelle Obama entered the chat the older generation started to tap into these sort of alternative user-generated content productions like Verzuz and what we’re going to see is an increasing amount of these sort of productions that happen through these new apps. Triller is a TikTok version. A U.S. TikTok version, and they did a boxing match.
Shimite: Okay. So Triller is TikTok but based in the U.S. Instead of China.
Chinedu: It’s a U.S. clone of TikTok.
Shimite: I can’t keep up with all these platforms! As a business owner. I’m trying to figure out my multi-channel marketing strategy. And its just so fragmented.
Chinedu: The way I consider all these social media platforms and I think most business owners should consider it similarly is that you can say let me try to use all of these platforms which have a vast audience and let me try to micro-target communities based on the different influencers that cut across that they influence cuts across America, maybe cuts across countries and that’s what the new media platforms offer. And then also the connected TV offerings provide a direct segmented marketing opportunity
Shimite: You know I was reading a statistic and it was saying that by 2021 — this year 61 million households will have a smart TV or connected TV and just like you were saying the level of targeting that can be done because people are logging in with their Facebook accounts or perhaps a Google account. And so you have that cross-device knowledge that these platforms have and absorb that can help with targeted advertising that’s being done.
Chinedu: When you think in comparison to traditional TV where advertisers have to buy slots with a specific TV show and hope that their audience is watching that show just the ability to say I will list a channel on Samsung and I will be instantly Global and have the ability to sell ads against a global audience just like you could with YouTube, but I can do it in other environments that are not YouTube. That’s where that’s the world that we’re getting to.
Shimite: I know that a lot of people who are subscribers to the “walled gardens”, they are getting subscription fatigue because there’s only but so many platforms you can subscribe to paying like 15 bucks a month. And then by the time you’ve added it up, you’re looking at $50 $60 $70 a month and that’s just rivaling the cost of traditional cable networks. So I do think people who have an appetite for a low-cost alternative where they’re paying a little bit of something or they’re not paying but they are in fact getting some small ads and they’re willing to sit through the ads in exchange for that really low-cost content delivery.
Chinedu: Sometimes the ads are more interesting than the content.
Shimite: My Grandma was on…I was at at my parents home for the holidays and my grandma was watching YouTube. She stumbled upon an advertisement. But the advertisement came and went and then I guess the main content…so she comes upstairs and she’s asking me you know, I can’t find this “Figure 8, Figure 8”. She has a Nigerian accent and I’m like, what is this Figure 8?
So we Google it. And it’s like this whole exercise where you’re like doing the Figure 8 with your hips and it’s supposed to help you with joint flexibility. So we ended up pulling up the like the the actual like full video. But yeah.
Chinedu: No but that’s you know that I bring that up because what’s very interesting and you’re going to see this concept kind of emerge where if you seen it some people are doing whole advertisements like 3 minute segments that they’re paying for on YouTube or on connected TV where they take the whole ad segment which is maybe 3 or 4 minutes and they place a whole entire video and that’s their ad campaign.
They’ll partner with the artists like a musician and that hot musician. They’ll pay for their ad Honda did this with Chloe and Halle. I don’t know how to say it.
Shimite: Chloe and Halle.
Chinedu: Chloe and Halle [mispronounces again]
Shimite: Those girls are growing up too fast
Chinedu: Exactly. But they paid for their music video to be promoted as an ad for Honda. So if you want to capture people’s attention you can partner with influencers — musicians in this case, sponsor their video to be promoted. So it’s a win-win where they have new content. You know their audience is similar to the audience you want. They now watch to the end of the video and they see your content either in the video or throughout at the end.
Now you have, you know, actually have a campaign that makes sense that will be viewed.
Shimite: Gets conversions, gets conversions.
Chinedu: Yeah.
Shimite: Yup! Well listen, I want to wrap up with some take-homes. This has been a great conversation Chinedu. There’s a book that I from time to time pick up. It’s called The Master Switch by Tim Wu and he’s a copyright law professor at Columbia, and what he does in that book.
He really talks about the evolution of industry and the cycle that we go through when it comes to invention and disruption of a native industry.
And that leading to consolidation and monopoly but there’s a cycle that we go through from telegraph, to the telephone, to radio, to television and you know now we’re in the digital age and very obviously TV is disrupted but it’s not dying.
It’s evolved into a new form. I think that we talked about maybe it’s time to ditch the dish and switch over to to this connected TV world because you are able to get much of the same content for less. And so that is the trend that is the wave and and for business owners.
What would you say that our take-home is?
Chinedu: As a business owner in 2021you have to leverage all the tools available for to you. But you have to be you know…
Shimite: Sort of platform agnostic in a way.
Chinedu: Yeah, platform-agnostic, customer-centric. Go to where your customers are. And now there’s an increasing amount of tools to target customers on the screens that they prefer the most.
Shimite: This has been Tea Time with the Suites. My name is Shimite Obialo. I’ve been joined by the illustrious Chinedu Enekwe. And we will see you next time.
