Ah. The death rattle. Right on schedule.
This was published over the weekend, documenting a drop in U.S. broadcast and cable TV revenue in the first quarter of 2015:
Overall TV -- all national TV, syndication, local TV, and cable -- slipped 1% for March and was down 6% for the first quarter of 2015. For the quarter, local TV spot revenues were down 12%, syndication was off 14%, and local cable ad revenues were up 5%.
The 2014 upfront market was down. The 2014 scatter market was down. The 2014 gross ad revenue total was down -- from a 2013 number that was also down. Magna Global predicts a 7% decline in the 2015 upfront. The recession has been over for 4 years. But network viewing erodes year after year, and TV watching overall by the most coveted demographics is plummeting. Viewership is remaining stable only in the leading edge of the Baby Boom generation.
The average viewer of network prime time has been dead since 2007.
I say this news arrives just in time because this week marked the tenth anniversary of the publication in Advertising Age of The Chaos Scenario, which predicted the utter disintegration of the global media-marketing economy. Unsurprisingly, some of its apocalyptic prophesies were received a bit skeptically -- especially by those with a vested interest in the status quo. Such as Timothy Balding, CEO of the World Association of Newspapers.
“The fashion of predicting the death of newspapers should be exposed for what it is -- nothing more than a fashion, based on common assumptions belied by the facts.”
Former CEO of the WAN, that is.
Denial was, as they say, platform-agnostic. Jack Kliger, then CEO of Hachette Filipacchi Media U.S. and the Magazine Publishers Association, asserted, memorably: “We are no longer threatened by digital media.”
Uh-huh. Since then, magazine revenue has dropped every single year and hundreds of titles have vanished from newsstands.
The most tectonic eye rolls, though, were reserved for defenders of the immutability of TV, which was deemed too entrenched, too powerful, indeed, too big to fail. The most accidentally profound of these critics was the venerable CBS research guru David Poltrack, who -- while dismissing the premise as unthinkable -- accurately identified the nub of the problem. If advertisers follow audiences out of broadcast TV, he said, "…then the entire marketing system that perpetuates this economy will be weakened. And this is not a problem for just the broadcast television networks. This is a major problem for everyone who markets a product to the consumers in this country. “
Yeah, that about sums it up.
Now, even back in 2005, it was clear that advertiser defection would lag the audience exodus -- because apart from denial, inertia and self-interest, the shrinking of mass audiences actually made those less massive audiences more valuable, in exactly the way the last gas station before Death Valley exacts a major premium. Hell, CBS’s Les Moonves bragged to investors about raising ad prices even as his ratings were dropping.
Which Chaos stipulated. But it also understood economic reason:
So for the moment, let's assume that there is indeed major trouble ahead, that the law of diminishing returns will eventually kick in, that advertisers who've paid more and more for less and less will not pay indefinitely for nothing. Marketers will begin to abandon network TV. Ad prices will fall. Profitability will disappear. Program development will suffer, leading to more advertiser defection, and so on in a consuming vortex of ruin.
Now if history shows anything about the End Times Prophecy racket, it’s the tendency toward proximity error. Institutions, economies and political systems don’t tend to collapse as quickly as the doomsayers predict. Until they do. I’m thinking of the gold standard. The Soviet Union. Apartheid. 'N Sync. Etc.
For what it’s worth, a decade ago this week, I gave broadcast and cable 15 years. Probably a bit pessimistic. But as Gorbachev and Lance Bass can corroborate, when the end finally comes, it can happen very fast.