Despite Cord Cutting, TV Dominates Advertising

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Pay-TV cord cutting will be minimal over the next several years. And while traditional TV viewership is in decline, TV will easily remain the most dominant platform for advertisers in years to come.

"Even though some consumers are cutting the cord, reducing their subscriptions, or not subscribing when starting a new home, the impact to the pay TV industry over at least the next five years will be minimal," says PwC's Cord Cutting and the Second Screen report.

PwC says there are multiple concerns about cord cutting, "cord trimming" and those who will never "cord" -- young viewers who never becoming pay TV subscribers.

Still, TV will continue to have major sway. The company notes that TV advertising influences on those 18+ are 37% compared with newspapers at 11%; Internet; 6%; and mobile, 4%. Other research, from eMarketer, says TV remains the dominant platform for advertising at 39% market share versus 22% for the Internet.

"While consumers are spending more of their media time on mobile and Internet-enabled devices, TV viewership remains strong... certain comedy and drama content, live sports, reality TV, award ceremonies, and other exclusive content remain largely real-time programming not conducive to time shifting," notes PwC. It also cites TV as a "communal activity that cannot easily be replaced."

Still, estimates are that there will be a 0.9% TV viewership decline annually through 2017 due to increased online consumption of TV programming.

Screen-screen activity continues to grow. For example, Internet-protocol TV (IPTV) ownership doubled in one year to 10.4% penetration in 2011 from 4.7% in 2010. PwC says almost half of American households own gaming consoles -- which are Internet-capable and can be used to stream TV content through multiple OTT options.

Some 36 million Americans report watching video content on their mobile phones. Smartphone sales are forecast to grow to $141 billion by 2016 from $79 billion in 2011; and tablet sales are projected to grow to $100 million by 2016 from $28 billion in 2011.

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9 comments on "Despite Cord Cutting, TV Dominates Advertising".

1. William Hughes from Arnold Aerospace
   

   commented on: February 21, 2013 at 5:11 p.m.
   Baloney. People have become disgruntled with the ever-rising costs of Pay-TV, combined with the southbound trajectory of the quality of what's being shown. The Collapse is imminent, a house divided against itself cannot stand.
2. Doug Garnett from Atomic Direct
   

   commented on: February 22, 2013 at 11:13 a.m.
   Great article, Wayne. Change is happening, but it won't be the change that the great disruption prognosticators are desperately wishing. It will be an evolution that will challenge all of us in and around TV. But the impending failure of Hulu as well as the strategic weaknesses Netflix revealed with their recent announcments ("No, really. We're great at programming!) suggests that nothing is what it seems and that TV's future isn't the desperate failure that many hope for it.
3. Jeff Bander from EyeTrackShop
   

   commented on: February 22, 2013 at 1:14 p.m.
   Dewey was called the winner too! The railroads thoughts airplanes had no commercial application. TV won't disappear but the shift is happening and it will be faster and more than TV wants. TV numbers are mostly reported by diary, a questionable methodology at best.
4. John Grono from GAP Research
   

   commented on: February 22, 2013 at 10:41 p.m.
   Jeff, and the Internet is mostly reported by tags and cookies - also a questionable methodology when used in isolation.
5. Doug Garnett from Atomic Direct
   

   commented on: February 25, 2013 at 9:34 a.m.
   Interesting to bring up Dewey. Because I think you have it backwards. Internet TV is the odds on favorite of the digiterati...like Dewey was the odds on favorite. The surprise may be that plodding "old" stuff (like Truman) will end up winning the long run. There is no lack of funding telling us TV will die. But there is lack of reality - because these new gizmos don't add value while keeping what people already love. Cheers...
6. Kevin Barry from Barry Marketing & Media
   

   commented on: February 25, 2013 at 9:37 a.m.
   Jeff Bander: TV numbers are not mostly reported by diary. The lion's share of local ratings use meter-based samples. The entirety of national ratings use meter-based samples. "TV won't disappear but the shift is happening..." I think that's correct. The only argument is when and by how much. In my experience, large-scale technological shifts usually change things more than we can imagine, but they take longer than we can imagine, too.
7. Michael Natale from MCM Media Sales
   

   commented on: February 25, 2013 at 10:31 a.m.
   Oy Vey Doug...Did you see NBC's Ratings post SUnday Night football in Feb? Lower than Univision. Please don't tell me the shift hasn't already happened. Lower ratings and higher costs are not a formula for success for Advertisers......period
8. Michael Natale from MCM Media Sales
   

   commented on: February 25, 2013 at 10:35 a.m.
   Read the NY Times article on NBC's atings decline today then get back to us on the state of the tv ad supported model. Can you say .9 in Prime against A1849 anyone? But in the upfronts their CPM's will undoubtedly increase 5-10% on hype and then 80% of the shows will be cancelled....but advertisers have to be there! If a tree falls in the forresst and nobody is there to hear it, does it make a sound?
9. Tom Messner from BONACCOLTA MESSNER
   

   commented on: February 25, 2013 at 5:34 p.m.
   Dewey was called the winner by a newspaper. Radio (Kaltenborn) called it for Dewey too. But the new medium, TV, was right in its first call by Richard c Hottlet or Charles Collingwood or Douglas Edwards or Edward R. Murrow. New media always crushes old media.

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