Commentary
Rethinking TV Ecosystem And 'Super' Viewers
- by Wayne Friedman , Staff Writer, August 20, 2015
Imagine a super viewer as someone who tunes in pretty much everyday, maybe to a news network, cooking channel, or sports network.
Looking at the future, you can figure that these very engaged viewers would be of big value. Maybe they’d even spend more on stuff some advertisers sell on those networks.
A lot of talk has been surrounding ESPN -- the biggest cable TV network -- and what will be its second act. Bet that super viewers will be part of the equation.
Todd Juenger, senior analyst of Bernstein Research, believes ESPN super viewers would spend premium monthly dollars on the network if they had to pay for it on a la carte basis through perhaps an OTT digital service. He says perhaps 33% of U.S. homes would pay $20 a month, and maybe even 25% of U.S. homes would pay $30 a month.
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Does this sound like a new way of thinking -- or something we have seen in the past? Think about HBO, for example, where for decades around a third of U.S. TV homes paid anywhere from $12 to $16 a month for this premium channel.
What analysts haven’t figured out is, what happens to national advertising for ESPN and other networks? What would national marketers do when they lost all that “scale” by just getting into a potential of 33% of U.S. TV homes?
Right now that’s a scary thought. But perhaps -- not too soon in the future -- TV will change, and marketers will need to adjust. The positive comes from where digital media is, and where traditional TV networks are going, in better targeting potential consumers.
But even with TV dipping lower in scale, it would still seem to have an advantage in this area -- though not as much -- in a new TV ecosystem. Maybe the idea of what is enough scale -- on a particular network, TV show or piece of content -- might change.
And don’t just think about ESPN.
Think if HGTV, Animal Planet, Comedy Central, WE, Hallmark, MSNBC, Bravo, CNBC, and ABC Family, for example found it necessary to determine all the research around their superfans. Not only that — but networks have to figure out what to charge super viewers in a new digital TV world.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
I find it really hard to believe that ESPN would suddenly abandon its ad dollar plus transmission fee model---which generates huge profits----to jump into a subscription-only business plan. For one thing, it is stuck with gigantic payments due to various leagues for the rights to air their games. Who's going to guarantee that ESPN can make the required payments if it fails to get enough subs as a stand-alone service?
As far as "super viewers"---oh goody, we've coined a new term for "loyal viewers"-----are concerned, as a rule, they constitute a small percentage of a channel's total reach, but account for a disproportionately high share of its total viewing tonnage--or time spent. You need to get a lot more than this small group to attain critical subscriber mass, deal with the inevitable "churn" problem, etc. Also, "super viewers" of some forms of TV are not terribly desirable as marketing prospects for many products because they are too old or too young, too badly educated, etc. So we have to be careful when pondering the dream of a fully unbundled TV world, where each channel is supported mainly by its loyal fans---the "super viewers". Indeed many channels share "super viewers" with other channels. This raises the question of how many channels could actually survive profitably, based primarily on super viewer subscription payments. I suspect that the answer is---not many.
You are taunting comments for and angst packages.