Commentary
TV's Audience Problem
- by Dave Morgan , Featured Contributor, February 26, 2009
According to just-released numbers from Nielsen, U.S. viewership of linear television (non-time-shifted viewing of broadcast, cable and satellite television) grew last year both in numbers of viewers and time spent per viewer. This growth occurred in spite of the fact that time-shifted television viewing, Internet video viewing and mobile video viewing all grew as well.
Wow! The world's most powerful media platform -- thought by many to be at a point of maturity or decline in the U.S. -- is still growing.
Television's audience problem is one of fragmentation. More people may be watching more TV, but unfortunately, they are watching many, many more channels and more programs than they used to. The pie may be bigger, but the slices of that pie are much smaller.
This is a major problem. Advertisers, who provide tens of billions of dollars of support for television programs, like their slices of pie big -- really big. While they have grudgingly put up with the constantly shrinking slice sizes over the past few years, most of them are getting close to their point of tolerance. Advertisers are starting to say that enough is enough.
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This is very bad for television broadcasters, networks and programmers, since they are so dependent on advertising to support their businesses. Thus, the television industry has shifted from a world of scarce distribution to scarce attention, and most expect much of the economic value to follow. Value in the future will be less about securing distribution of programming and more about attracting and retaining audiences for programming, probably on a case-by-case basis.
Why are audiences fragmenting so much? Certainly, part of the problem is that with many more choices -- actually, an explosion of programming choices -- it is quite natural for viewers to spread themselves out among the many different types of channels and programs now available. Folks are no longer tied to only three broadcast networks for their television programming.
But that's not the only problem. I believe that viewer confusion and ignorance may be a very big driver of fragmentation as well. With so many choices on so many channels at so many different days and times of the day, it is practically impossible for viewers to know what's available to them at any one time.
It is a navigation issues. Viewers are confused. They lack information. Old tools like TV Guide magazine, TV listings in newspapers, and "lead in, lead out" programs, are largely obsolete and ineffective.
What about Electronic Programming Guides? Navigating those are like trying to use computers in the pre-graphical user interface days. They're not very user-friendly and only provide very "flat" information.
How will the viewer confusion problem be fixed? Shrinking the number of programming choices is certainly not an option -- the toothpaste is already out of that tube. Clearly, the television industry needs to find ways to better promote their programming to the right viewers at the right time. They need to find ways to distribute more relevant information closer to viewers about what programming is available that they might be interested in.
Almost 25% of all commercial time on television is used for program promotion. That represents at least $10 billion dollars of value, not to mention the several billions of dollars that broadcasters and cable nets and programmers spend "off-channel" to promote their shows.
To date, there is only a limited amount of science brought to bear on this process; not much was ever needed in the past since it always worked. That has changed. Now, I think, is the time to bring much more science to the television program promotion process. It could go a long way toward ameliorating audience fragmentation, or at least bring more predictability to managing audience flows. What do you think?
Fantastic article. I had never thought of the problem as navigation, but I think you're absolutely right.
If so, there's a potentially huge opportunity in the Electronic Programming Guide business. As TVs become internet-enabled, could somebody disintermediate the EPGs used by cable companies? A company like Yahoo might actually be able to pull this off, if they wanted to.
Yahoo execs, are you listening? You already pretty much all the data: what's needed is an interface that makes sense of it in a way that can be monetized.
Of course that still leaves the problem of audience fragmentation. But, if I'm understanding you correctly, you're arguing that better program promotion should lead to bigger audiences for specific shows. This makes a lot of sense to me too.
Somebody ought to pay attention to what you wrote. There's a lot of good stuff in there. Thanks!
I'll bet first on a fairly substantial reduction in program options -- not because no one's watching, but because no one's paying. Advertising has always been TV's coinage, and if advertisers find themselves unhappy with the current set of options, they'll stop paying. And since most consumers aren't interested in paying (or are already strapped with the cable bill they already have), it's inevitable that as the dollars cease to flow from advertisers, program consolidation occurs.
Sounds like we need a 'Pandora,' iLike, or Apple 'Genius' of TV content recommendations. Just as my Tivo recognizes and records my favorites in its more first-generation way, one of the portals--or Hulu--should learn from our online viewing or content consumption behavior and provide TV programming suggestions. "Shows You Might Like--Tonight" Maybe it starts as an iPhone app.
You are overlooking some critical issues. First, fragmentation is not just about multiple cable channels... I have no problem finding what I want to watch on cable television (including network TV). The fragmentation extends to all forms of media and entertainment. When I grew up I had a choice of three stations... or I could go outside and play in the garage... no video games... no iPod... just my imagination. My kids, by contrast, spend very little time watching TV. Most of their time is spent playing video games (on and offline), surfing the web, talking to friends, playing in their own garage band (at least we have that in common). The point is that the fragmentation is a lifestyle issue and extends across all media as well as all forms of entertainment. But the television industry has figured out they need to be online and they are doing it their way. They have their own distribution systems, their own online ad networks, and they are bringing their own business models online as well. In the end, the television industry is going to change the online industry more than we will change theirs. We need to become more sophisticated in defining the different ways in which media is consumed online. A single site will offer multiple choices (text, rich media, high dollar productions, user generated content, and much more. Ultimately, the challenge for finding the content you want will increase and the media brands themselves will have to resort to what all businesses depend on... a good marketing campaign.
A programming resource I recently came across is www.LocateTV.com which is pretty tight. Beyond that, enabling drivers of motor vehicles to 'hear' real time local 'ota' broadcast television will serve to 'keep them in the loop'. www.HearTVInCars.com
"Now, I think, is the time to bring much more science to the television program promotion process."
Is there a startup idea there Dave? :)
Saying fragmentation is a problem for traditional TV viewing seems to be stating the obvious. But fragmentation is a problem for ALL video - not just traditional TV.
There are HOURS AND HOURS of video viewing available online, but it's ridiculously fragmented. Finding the show you want to watch isn't difficult if you go to the network site, but finding the specific episode or a particular clip can be very difficult.
It could be added that another problem is falling CPMs for traditional TV. But, of course, we're seeing online video and VOD CPMs fall, as well (and by higher %'s).
And I disagree that viewing guides are cumbersome. The guide my cable provider has is excellent and I have no problem finding a show at any point in time, and if need be, TVGuide.com still works tremendously well.
There is still a tremendous value in traditional TV, however. This is the simple fact that you can attain tremendous reach with a single unit aired. Traditional TV, even with the erosion that has taken place over the last 30 years, is still the best place to make a huge statement quickly and easily.
The real issue is how do you expand and augment the message you can get on traditional TV without potentially overcannibalizing yourself?
One way, which would be terrific, would be if agencies would be willing to purchase shows in a package - online, VOD AND their linear counterpart. This would assure they reach a desired audience.
In addition, if linear TV continues to erode, advertisers can potentially make up lost audience with online or VOD viewers - which are growing.
For consumers of TV, now is a literal golden age for couch potatoes.
As audiences mature their media consumption patterns tend to be more predictable, "branded" if you will. TV, Radio and Newspaper are all morphing into a sort of interactive DVD broadcast; migrating to the Internet with traditional textual stories, additional sites, and video linked to them.
It is my belief that the intellectual community will always seek out the written form of information to ferret out fact from fiction, obtain specifics on a topic, and continue to practice the somewhat lost art of the written word.