Commentary

When Did TV Become A Luxury?

by Lydia Loizides , Op-Ed Contributor, April 24, 2009

Is it the recession talking when Pew reports that 52% of Americans think of their TV as a necessity, a figure that's down 12 percentage points from 2006? Probably. But take into account that that is the smallest share to call a TV a necessity since the question was first asked 35 years ago. Yes, you read right: the lowest ever in the last 35 year. Granted, the survey was executed during April 2-8, not a stellar business week in U.S. history. But that is no reason to be complacent about double-digit losses unless there is some guarantee of double-digit recovery and subsequent growth.

What I find most of concern here is, when you look at a set of data that point to the overall valuation of television entertainment and the driver of that industry, advertising, Pew found the following:

1. Decline in importance of cable or satellite TV ( 23% in 2009, down 10 percentage points from 2006).

2. Minuscule drop in importance of the home computer as a necessity (50% in 2009, down 1 percentage point from 2006)

3. The increase (yes, increase) of high-speed Internet viewed as a necessity (31% in 2009, up 2 percentage points in 2006)

4. Twenty four percent of respondents indicating that they have reduced or cancelled cable or satellite TV subscription.

5. Fifty seven percent of respondents who have bought less expensive brands or shopped more at discount stores.

What does all this doom and gloom mean for the television industry (and by default, television advertisers)? An incredible opportunity to define and implement near-term learning exercises to drive long-term growth opportunities. This is the voice-of-the-customer telling us that we are losing relevance in their lives and it is up to us, as constituents of this ecosystem we call television (and I mean that in the broader sense of an ad-supported entertainment market) to fix that.

And where does the answer lie? In integrated and widely deployed advanced television services and applications, of course -- everything from interactive advertisements, online content entitlement strategies, multi-platform campaign measurement, etc. And yes, we have heard this all before, and yes, we have been at this for 15 years and little has impacted the everyday business (except if you count disintermediation and cannibalization as positive outcomes). But I ask you this: Can we. as a multi-billion-dollar industry afford to stop trying, pushing, compromising, collaborating and innovating? Hopefully your answer is no.

6 comments about "When Did TV Become A Luxury?".

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Joshua Chasin from KnotSimpler, April 24, 2009 at 3:04 p.m.
Hey Lydia.
Let's see how that number tracks. Indeed for an increasing number of consumers, TV-- if we intend that to mean, the appliance through which we receive broadcast, cable, or satellite transmissions of commercial television content-- is in fact not necessary. Anecdotally we hear about 18-24 year-olds who don't even own a TV-- one of the kids here in the office who hasn't got a TV mocked me when I expressed surprise: "Haven't you ever heard of Hulu?" Just as a new generation perceives a landline phone as anachronistic, so too, and quite soon, will a new generation see "TV" in the same light.
What is TV actually necessary for? Not for watching "Lost." Not as a news source. Not even to watch a ballgame at home (I can subscribe to that online.) Truly, a diminishing of perceived necessity of "TV" is to be expected, and I'd bet will accelerate.
Cheers.
--josh--
Reply

Ray Trosan from mullen, April 24, 2009 at 3:25 p.m.

It became a luxury when it went from free to $100 a month

Paula Lynn from Who Else Unlimited, April 24, 2009 at 3:36 p.m.

When the cost of hooking up adds another hundred dollars a month and internet connection kicks in about another fifty. For those households only bringing in $25,000 - $50,000 gross annually with real bills to pay, $1800 net income to go to those "luxuries" become impossible even though we think of them as necessities. Add in all of those jobs lost, foreclosures and more people taking in more responsiblity for more people and something has to give. (And wait until those kids eyes go blurry with the little screen and bodies can't scrunch up as they can do as kids.)

Also, how about some info about the demos of who was interviewed for that Pew study?

Douglas Ferguson from College of Charleston, April 24, 2009 at 3:58 p.m.

Maybe the issues with reception that led many of us to get cable in the first place are resolved with digital TV (though not for all). I've noticed that over-the-air signals look surprisingly better on my big screen TV when they come through the $20 antenna in my attic than they come through the cable system (using back-and-forth comparisons). No doubt there's less choice over-the-air, but the picture is stunning. And any shows that I miss on cable channels can often be viewed over Hulu or DVD compilations.

Paul Scivetti from Synergen, Inc, April 24, 2009 at 6:46 p.m.

In my view, the 'TV experience' of today, factoring in all the costs (time & money) and weighing that against all the returns on that investment, is severely lacking in value compared to other media channels available today. Every media channel that aspires to be 'necessary' going forward needs to earn that position in the hearts and minds of consumers.

More and more, 'TV' as we know it - a device that broadcasts a stream of (dubious) content into our homes on a schedule of the network/cable operator's choosing (TiVo not withstanding), complete with a never ending blizzard of annoying interruptions (aka “commercials”) - is increasingly irrelevant to modern life. This trend is in the rise and will only increase as broadband Internet gains more penetration in the market.

The 'mega-hit' culture that drives 'must-see TV' is dead. In ever-growing numbers, consumers want to be in charge of what, when and how they consume content. (Imagine that!) Furthermore, in the presence of almost limitless content choices and a finite amount of hours in the day, people are getting pretty darn picky about the content they spend their time consuming. Like it or not, consumers are now squarely in the driver’s seat.

Content on demand is the future of our always on, always connected world. Bring real value to the consumer or go home.

John Jainschigg from World2Worlds, Inc., April 25, 2009 at 9:12 p.m.

In any case -- is this a bad thing? TV is, and has been for generations, the prime mechanism whereby marketers pull dollars from the pockets of the poor to satisfy manufactured needs, and the "babysitter of last resort," acting as palliative to prevent the poor, single parents and other groups from taking to the streets and demanding government-subsidized, wholesome childcare.