CAPITAL DISTRICT — Broadcast television is at a crisis it has not seen since the advent of cable in the early ‘80s — and by broadcast television, we mean cable.
The latest Total Audience Report released by the Nielsen Company states that Americans are spending less time in front of live broadcast television compared to a few years ago; about 20 minutes less, on average. Since 2013, Americans are spending more time plugged in. An average person spends an hour more with gaming, social media and streaming.
“Media pundits will tell you that our industry is in a state of flux. And they’re right,” said Dounia Turrill, Nielsen’s senior vice president for insights. “It has been for quite some time. But why is today different than the mid-1980s, when we saw the rise of cable networks all vying for audiences from the big networks, who had up until then owned that total audience and nearly all the ad dollars that went with it?”
Turrill’s question is a rhetorical one. Nielsen, as in the famed Nielsen Ratings broadcast executives cling upon to determine the viability of their programs, is well aware of the breakdown in audiences. It comes down to the variety in which people choose to entertain themselves.
Unlike the mid-1980s, today’s consumers have more gadgets at their fingertips than they did three decades ago. Home computers were not as prevalent and gaming systems were considered more child’s play. However, each are among several categories Nielsen charts within its quarterly surveys. That also includes smartphone and tablet usage.
“[Consumers] have the ability to port content—both video content and audio content,” said Turrill. “Devices and services that enable on-demand access to content, subscription on-demand services that deliver programming content as well as audio content, are growing by leaps and bounds. And technology begets technology.”
Last April, Variety reported the results of a Deloitte survey stating that Americans are more likely to watch streamed content than live television. Within the consulting firms report, 42 percent of consumers use Netflix, with about 56 percent of viewers streaming movies and 53 percent steaming television. Less than half (45 percent) prefer watching broadcast television.
“Our rental agreement includes cable but before that we went for years without it,” said Michelle Boomhower, of Albany. “From a parent’s standpoint, even the ‘family-friendly’ channels are not family-friendly and even if they are, I can’t control the commercials my kids see. We opt for Netflix when the kiddos are watching.”
Cable television is in need of reinventing itself, much as Netflix did. The popular streaming company that usurped Blockbuster Video when it started up as a mail-in DVD rental company in 1997, turned to streaming content in 2007. Since then, the concept caught on with the mass market. As numbers indicate, audiences are spending less time with what cable provides, and more with what the Internet has — and subscription prices have something to do about it, too.
“I have a rooftop antenna, and I have Sling TV which is cable channels live streamed through the Internet,” said Jennifer Lescovich, of Clifton Park. “I get ESPN, HGTV, AMC, TNT….and quite a few others. I also have Hulu and Netflix and still pay $100 less than cable.”
Those who choose to ditch cable completely for streaming content register among the few in Nielsen’s surveys. Less than five percent of audiences choose this route. Nielsen even suggests this is more of a phenomenon popular with Millennials leaving the nest and striking out on their own.
“Persons aged 18 to 34, who are on their own are the least likely to have multichannel service, and the most likely to be in a broadband-only home,” stated Nielsen in its Total Audience Report covering the fourth quarter of 2015. “Millennials in the ‘starting a family’ life stage are more likely than those without children to have multichannel service or a working antenna. This implies that doing without cable and solely relying on Internet-streamed video may be a life stage choice rather than a permanent decision.”
Nielsen’s grasp on America’s viewing habits is not absolute. The popular analytics firm has come under criticism for not including streaming viewership within its reporting metrics. In February, Nielsen reported it would include Netflix, Amazon Prime and Hulu as selectable options within its survey.
“Increased video viewing on digital platforms to both native digital content and TV-produced content, as well as the rise of subscription-based video on-demand (SVOD) across all platforms, are changing the way we look at the consumption of traditional media,” Turrill said last year. “Measurement holds a key to enabling true understanding of today’s changing audience behavior (in real-time) to inform dynamic content and advertising in an ever-fragmenting media world. Accordingly, to do so, audience measurement will transform dramatically to capture and accurately value the Total Audience (Report).”
Cable seems to be on the move to address the precipitating number of viewers to traditional broadcasting. How this move translates to consumers, remains a question.
Last year, Charter Communications announced a proposed merger with Time Warner Cable, and later with Bright House. The combined acquisition has since received state level approval and awaits clearance from the Federal Communications Commission. At a combined value of more than $80 billion, the conglomerate would be the second largest cable entity, controlling nine of the top 25 market areas and servicing 48 millions households.
Time Warner Broadcasting, the media company that owns and produces content for CNN, HBO, TNT and Cartoon Network, is not keen with the idea of a larger, New Charter cable company. It filed against the move with the FCC over concerns it would hamper broadband content, a claim Charter has already denied. What also comes into play is the possible loss of power those individual networks would have at the negotiating table. Cable subscribers are familiar with blackouts during contract disputes between a cable provider and a network. With New Charter in control of a larger consumer base — or demand — opponents to the merger worry it tips the scale away from supply. In other words, content providers will be forced to drive prices down.
“If content is widely available, the price customers and service providers are willing to pay is lower,” states Charter. “It is simply Economics 101. Asking Charter to continue to pay the same rates despite increased availability of the content is akin to asking us to punish our customers for using our service.”
Just a few weeks after the merger was approved by New York State, Time Warner announced a price hike, striking the ire of its customers in the Empire State.
Broadband, especially those consumers who choose to go without cable, remains the wildcard. Though Nielsen suggests less than five percent of households view broadband content exclusively, some suggest that figure is higher and accelerating.
The Diffusion Group (TDG), a Texas-based research firm established in 2004, say that figure should be more like 13 percent, or about 11 million households. That figure has been going up over the years. An estimated 9.5 percent of households were “cord cutters” or “cord nevers” in 2010. TDG forecasts that 17 million households will be broadband exclusive by next year.