FT: TV’s lost generation streams away

JTMan

There is a fantastic article in the FT here about the impact streaming is having on broadcast revenues, the article focuses on the US.

There is a seismic change in broadcasting under-way ...

• Viacom viewership is down 18% YoY. (Q4 on Q4)
• BET viewership is down 22% YoY.
• Nickelodeon viewership is down 17% YoY.
• MTV viewership is down 14% YoY.

• Time Warner have said there is a massive "secular shift" occurring in broadcasting.
• An advertising executive has called the change “alarming” and “unprecedented”.
• The Nelson C3 ratings have shown rapid recent declines. The FT Nelson graph is an eye opener.

Meanwhile, about 7.6m US households no longer get cable TV. From 2010 to 2014, the number of cord cutters increased by 44% according to a separate report from the Guardian today.

Evidence is mounting that streaming is starting to cause accelerating declines in traditional TV consumption.

Elmo

JTMan wrote: »

There is a fantastic article in the FT here about the impact streaming is having on broadcast revenues, the article focuses on the US.

There is a seismic change in broadcasting under-way ...

• Viacom viewership is down 18% YoY. (Q4 on Q4)
• BET viewership is down 22% YoY.
• Nickelodeon viewership is down 17% YoY.
• MTV viewership is down 14% YoY.

• Time Warner have said there is a massive "secular shift" occurring in broadcasting.
• An advertising executive has called the change “alarming” and “unprecedented”.
• The Nelson C3 ratings have shown rapid recent declines. The FT Nelson graph is an eye opener.

Meanwhile, about 7.6m US households no longer get cable TV. From 2010 to 2014, the number of cord cutters increased by 44% according to a separate report from the Guardian today.

Evidence is mounting that streaming is starting to cause accelerating declines in traditional TV consumption.

This is particularly true for niche broadcasters which Viacom are heavily involved in, not sure if they are still involved with CBS.

icdg

No, they demerged a few years back, though they have common shareholding in the Redstone family.

Basic cable - Viacom especially, but also UKTV, NBC, and Fox - should be the most worried by the "cord cutters" as it is this market - the drama/comedy repeats - that is Netflix's target audience. Discovery and Sky maybe less so as Discovery is primarily factual and Sky has a lot of exclusive content.

JTMan

More evidence that streaming is rapidly reducing traditional TV broadcast viewership ..

WSJ: Streaming Services Hammer Cable-TV Ratings

https://www.google.ie/search?q=Streaming+Services+Hammer+Cable-TV+Ratings&rlz=1CASMAE_enIE630IE630&oq=Streaming+Services+Hammer+Cable-TV+Ratings&aqs=chrome..69i57j69i60j69i61l2&sourceid=chrome&es_sm=0&ie=UTF-8#safe=off&tbm=nws&q=Streaming+Services+Hammer+Cable-TV+Ratings+The+CAB+said+it+estimates+that+about+40%25+of+third-+and+fourth-quarter+TV-ratings+declines+can+be+attributed+to+such+subscription+video

The primary reason for the steep fall-off in viewership, the trade group said: consumers are spending more time watching subscription streaming-video services like those from Netflix Inc., Hulu and Amazon.com Inc.

The CAB said it estimates that about 40% of third- and fourth-quarter TV-ratings declines can be attributed to such subscription video services, the people said.

Total TV viewing fell about 10% from a year earlier in the third quarter and about 9% in the fourth quarter, according to an analysis of Nielsen data by Sanford C. Bernstein.

The Diffusion Group estimates that U.S. consumers streamed 5.64 billion hours of Netflix in the fourth quarter, a nearly 31% increase from a year earlier.

Elmo

Streaming is taking the place of Trad TV but frist it will rid us of the over rate and far too many niche TV channels before it gets to mainstream broadcasting.

Lets face it Music TV died at least 8 years ago, if not more. If you want to see a music video you go to YouTube or another online video service.

Too many ads are putting people off, particularly in other countries. Total insanity that the BAI decided to increase TV3 (commercial TV's) advertising time. People won't hang around for ads anymore, something broadcasters need to face up to.

Netflix came in at the right price point. If it starts heading over €10/$10/£10 it will start to suffer, even the idea have having premium HD will start to deter audiences to Netflix, get people at less the €10 what is winning audiences after that I don't see people paying.

So far the broadcasters' advertising (too much) on their on-demand services is turning people off. The distributors also need to realize that broadcasters stop being a part of the exploitation of content. The days when RTÉ2 (traditional broadcasters) could get away with a 3 month gap for a US show is long gone (prob since LOST's arrive which is now 10 years ago), but to now have a situation where Gotham is on 3 months after its release in the US and then not to be able to have it as a boxset up to the end of its run is just madness how can tradition TV broadcasters compete with that type of deal? If distributors want to keep broadcasters on board (and exploit that type of distribution) they will need to sell the series at the current price point and also provide on demand up to 2 months after the show ends.

Hollywood is slow losing local providers. There is room for both an ad based service and a pay based on demand service. If people want to pay out not to have advertising then they will.

icdg

Basic cable and Sky Movies have the most to worry about but even they could last another 10-15 years. The traditional broadcasters are going nowhere and neither is Sky Sports, which will probably be around as long as it can keep buying the Premier League rights.

JTMan

icdg wrote: »

Basic cable and Sky Movies have the most to worry about but even they could last another 10-15 years. The traditional broadcasters are going nowhere and neither is Sky Sports, which will probably be around as long as it can keep buying the Premier League rights.

"Going nowhere" logic, without caveats, misses the bigger picture. At a one dimensional level you are right, in 10 years time, you will probably still be able to watch most mainstream currently-popular traditional TV stations. By the same logic, perhaps the dying print industry will still have 1-2 newspapers distributed in Ireland in 10 years time.

But what is going to happen during those 10 years? and what carcasses will be left with a weak pulse? Some traditional broadcasters will go bankrupt, most will experience huge drops in revenue, Cable TV subs will continue on gradual terminal decline curve, as will satellite. Google, Apple, Amazon and Netflix will become the new kings of video content distribution. The whole notion of waiting for a time slot to watch non-live content will be dead or near-dead. Live TV is far from immune, pick and select matches will happen, the delivery method of live TV will move from satellite, cable and terrestrial to streaming as will a movement from regional to global distribution channels.

Massive change coming to the TV industry. Many broadcasters are about to become relics of their former self, new global streaming providers will flourish.

icdg

I don't deny that. But you have to look at the same time at what these companies offer. Mostly movies and scripted series, along with a small number of documentaries. Then look at what they don't offer:

News - no interest in doing this. They operate on a global level of course and running that sort of news operation is very expensive and only a few can do it properly (ie the BBC and CNN).

Sport - no interest. Arguably something they could actually get into quicker over here given that US sporting bodies have a tendency towards free to air that doesn't exist in Europe (for example all but one NFL game each week is shown FTA in the US, and that one game is on a basic cable network) whereas sorting bodies over here are happy to sell to pay-tv broadcasters. This is very important as sports is now the biggest driver of pay-TV since the arrival of Freesat.

Irish programming - good luck finding this on Netflix. Ever.

Talk shows- none.

UK programming - plenty of repeats sure, but where is Netlflix's first run UK made programming?

Elmo

JTMan wrote: »

But what is going to happen during those 10 years? and what carcasses will be left with a weak pulse? Some traditional broadcasters will go bankrupt, most will experience huge drops in revenue, Cable TV subs will continue on gradual terminal decline curve, as will satellite. Google, Apple, Amazon and Netflix will become the new kings of video content distribution. The whole notion of waiting for a time slot to watch non-live content will be dead or near-dead. Live TV is far from immune, pick and select matches will happen, the delivery method of live TV will move from satellite, cable and terrestrial to streaming as will a movement from regional to global distribution channels.

Cable TV will continue to do well since its also providing Cable Broadband cable services will just start to reduce the number of television channels that it is willing to pick up from the likes of Discovery and Viacom. Some I believe have started to provide Netflix to their customers along with their TV/Broadband subscription in the same way as they provide 20 channels from Discovery.

Here Sky will looking to change its method of carriage Satellite TV will probable start to collapse after the numerous sky channels.

What we will begin to see is on-demand more and more in the living rooms. Slowly broadcast transmission will deplete and the so called niche broadcasters have been the slowest to move, MTV really should be YouTube or have set up some type of YouTube, a big brand total unaware of what was happening.

I don't watch news, I might see an interview but rarely to I sit to watch the news I find most of my news on the web and I read it, I don't really understand why newspapers feel they need to provided Video content, a lot of which is unwatchable.

The big question is for advertisers how do they get an audience? Do any of pay on-demand services provide advertising sales? The next shake up will be when Netflix launch a free version of Netflix which has advertising as the business model.

shedweller

Ads will pop up everywhere. There will be no escaping them no matter what way we watch our media. So we might all be swarming towards streaming but before long it will be swamped in ads. Watch this space!

JTMan

icdg wrote: »

I don't deny that. But you have to look at the same time at what these companies offer. Mostly movies and scripted series, along with a small number of documentaries. Then look at what they don't offer:

News - no interest in doing this. They operate on a global level of course and running that sort of news operation is very expensive and only a few can do it properly (ie the BBC and CNN).

Sport - no interest. Arguably something they could actually get into quicker over here given that US sporting bodies have a tendency towards free to air that doesn't exist in Europe (for example all but one NFL game each week is shown FTA in the US, and that one game is on a basic cable network) whereas sorting bodies over here are happy to sell to pay-tv broadcasters. This is very important as sports is now the biggest driver of pay-TV since the arrival of Freesat.

Irish programming - good luck finding this on Netflix. Ever.

Talk shows- none.

UK programming - plenty of repeats sure, but where is Netlflix's first run UK made programming?

When Aldi launched in Ireland they had little local produce. Scale was required to justify the addition of local produce in stores. The same logic applies to streaming providers, in time the streaming providers will add local content and a more diverse range of content. It will come. Google may be better placed to capitalise on local and diverse streaming content than NetFlix.

Some traditional TV providers will thrive if they adopt to the new streaming paradigm.

JTMan

WSJ: Apple Plans New Web TV Streaming Service this Fall

https://www.google.ie/search?q=Apple+Plans+Web+TV+Service+in+Fall&rlz=1CASMAE_enIE632&oq=Apple+Plans+Web+TV+Service+in+Fall&aqs=chrome..69i57j69i60l2j69i61&sourceid=chrome&es_sm=93&ie=UTF-8#safe=off&tbm=nws&q=Apple+Plans+Web+TV+Service+in+Fall+In+talks+with+programmers+to+offer+a+slimmed-down+bundle+of+about+25+channels

Meanwhile, Apple has been talking to Walt Disney Co., CBS Corp., and 21st Century Fox Inc., among other media companies. The idea is to offer consumers a “skinny” bundle with well-known channels like CBS, ESPN and FX, while leaving out the many smaller networks in the standard cable TV package.

Some media executives said they believed Apple was aiming to price the service at about $30 to $40 a month. The company is aiming to announce its new service in June and launch it in September, according to people familiar with the matter. The service would work across all devices powered by Apple’s iOS operating system, including iPhones, iPads and Apple TV set-top boxes.

In the most recent talks, Apple is continuing to propose creating a live TV streaming service with a vast on-demand library that would be stored in the “cloud.”

Big change is coming.

shruikan2553

US cable companies have helped create their own problem. They treated their customers like **** for ages as where else would they go? Now people can escape so do.

mollser

Don't apple need the cable companies to deliver their service via broadband tho? Interesting that Apple are going for a slimed down version, exactly the opposite of the premium service they usually push for

JTMan

Broadband providers have no choice but to provide all data, including Apple data, in the same unbiased manner, thanks to the new FCC net neutrality rules.

From Wikipedia's net neutrality page ...

On 26 February 2015, the United States FCC ruled in favor of net neutrality by reclassifying broadband access as a telecommunications service and thus applying Title II (common carrier) of the Communications Act of 1934 to Internet service providers.[69][70][71][72][73] The FCC Chairman, Tom Wheeler, commented, "This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech. They both stand for the same concept."

Elmo

JTMan wrote: »

When Aldi launched in Ireland they had little local produce. Scale was required to justify the addition of local produce in stores. The same logic applies to streaming providers, in time the streaming providers will add local content and a more diverse range of content. It will come. Google may be better placed to capitalise on local and diverse streaming content than NetFlix.

Some traditional TV providers will thrive if they adopt to the new streaming paradigm.

You really can't apply Supermarkets to broadcasting. Tesco launched in Ireland in the 1980 and failed largely down to their lack of fresh foods.

Take BSkyB. It's been in Ireland since the mid-1980s towards the end of the 1980s Sky One had 9% share of the Irish audience (largely because cable services in Ireland). Yet its only in the last 3 or so years that it has produced any Irish programmes (Moone Boy and 50 Ways to Kill your Mammy). Yes it fobbed Irish audiences with Sky News Ireland and according to them failed (though Sky have about 15% of the overall advertising market :rolleyes: ).

Look at how extra broadcasters have worked in England, I can't think of a Discovery Channel Original from England, though I know they have bought BBC docs. In reality even in the US the Original Discovery Channel largely bought PBS and BBC docs for repeat consumption (something Netflix does).

Netflix is positioning itself so that it doesn't have to deal with broadcast commissions and can own the rights to new original serials along with on-demand archive programming. (Something Discovery started doing in the mid-1990s)

I can't see Netflix producing a European Drama anytime soon. If they do it will either be Spanish or English.

STB.

JTMan wrote: »

When Aldi launched in Ireland they had little local produce. Scale was required to justify the addition of local produce in stores. The same logic applies to streaming providers, in time the streaming providers will add local content and a more diverse range of content. It will come. Google may be better placed to capitalise on local and diverse streaming content than NetFlix.

Some traditional TV providers will thrive if they adopt to the new streaming paradigm.

Your analogy is not all that unsound.

However, local content is not the primary problem. The technical infrastructure is. Provincial ALDI/LIDL shops would not exist if roads werent already in place. Ireland still does not have a freely available cheap, fast and dependable internet backbone. There are parts of the country still with 2meg broadband or none at all. IPTV is nowehere near ready to upsurp traditional satellite and terrestrial television delivery methods.

Receiving equipment is slowly maturing, but not at the rate that people think. Combined Satellite/Terrestrial and IP boxes are already on the market to cover all these eventualities according to ones facilities. In the past year we are now seeing more powerful processing chips, but that is reflected in the end cost to the unit itself.

Public Service Broadcasters in Ireland the UK and indeed Europe will continue to provide the service based on the most econonically and technically feasible way of achieving their statutory peopulations targets. When I mention economics I am pointing to example that UK PSB's have been slow to drop transmission video compression formats because of legacy equipment (the UK still use MPEG2 for SD content).

The only people who are at a loss are those who provide pay per view services on the traditional platforms. Mainly because not everyone subscribes to pay TV or specific packages. And for those that do, even the temptation of replacing Sky Movies with Netflicks etc is dependant on suitable internet infrastructure being in place, diluting numbers further.

JTMan

Another great article on the WSJ about the systemic change taking place in broadcasting and how it is effecting the ongoing structural decline of the old traditional TV advertising.

https://www.google.ie/search?q=Changing+TV+Landscape+Colors+%E2%80%98Upfront%E2%80%99+Sales+Outlook&rlz=1CASMAE_enIE632IE632&oq=Changing+TV+Landscape+Colors+%E2%80%98Upfront%E2%80%99+Sales+Outlook&aqs=chrome..69i57j69i60&sourceid=chrome&es_sm=0&ie=UTF-8

Todd Juenger, a Bernstein Research analyst, said in a note earlier this month that the “U.S. television industry is entering a period of prolonged structural decline, caused by a migration of viewers from ad-supported platforms to non-ad-supported, or less-ad-supported platforms.”

Indeed, the Cabletelevision Advertising Bureau, an industry trade group, recently told media executives that it estimates 40% of the TV ratings declines suffered in the second half of last year were due to viewers migrating from traditional television to subscription streaming services like Netflix.

Fast-food chain Wendy’s said it will be committing fewer dollars to the TV upfront this year because it is continuing to shift some of its TV dollars to online video outlets. While some of Wendy’s TV dollars will be spent buying online video products offered by TV networks, the company will also be using the funds to buy ads on Facebook and YouTube, said Brandon Solano, Wendy’s chief marketing officer. “Digital video had helped us push out more emotional messages,” Mr. Solano added. “That was harder to do in old-school digital.”

JTMan

Elmo wrote: »

I can't see Netflix producing a European Drama anytime soon. .

One needs to distinguishing between the direct commissioning of local content and the integration or acquisition of local content. I agree that NetFlix is unlikely to directly commission local content in Ireland in the near future. However, short term, I think that the streaming providers will parter up for local content. Long term, I think some streaming providers, especially YouTube / Google, will produce local content though an open access relationship with production companies.

Take Apple for example. Apple in the US is partnering with all major US broadcasters, except Comcast, for their new Apple TV product that will be released in June 2015. Apple will be peddling their own content as the primary content source but realises that it needs to buy-in content from the traditional broadcasters, such as current affairs, to ensure that Apple have a cord-cutting product.

Local content supply will not stop this streaming paradigm change.

Sam Russell

I have basically given up on streaming due to its clunky slow switch on and its heavy advertising load. It has also proved to be unreliable - breaking connection for no reason.

I would not to rely on it for main TV reception.

Elmo

JTMan wrote: »

One needs to distinguishing between the direct commissioning of local content and the integration or acquisition of local content. I agree that NetFlix is unlikely to directly commission local content in Ireland in the near future. However, short term, I think that the streaming providers will parter up for local content. Long term, I think some streaming providers, especially YouTube / Google, will produce local content though an open access relationship with production companies.

Take Apple for example. Apple in the US is partnering with all major US broadcasters, except Comcast, for their new Apple TV product that will be released in June 2015. Apple will be peddling their own content as the primary content source but realises that it needs to buy-in content from the traditional broadcasters, such as current affairs, to ensure that Apple have a cord-cutting product.

Local content supply will not stop this streaming paradigm change.

This is one of the major issues from an Irish perspective. RTÉ, TV3, TG4 and UTV Ireland are very low on Drama commissions. The most recent drama's that Netflix might be interested in are Love/Hate, Amber and Corp 'S Anam. While both TG4 and RTÉ have some high quality documentaries.

No streaming will continue to grow but it will be on the move of broadcasters in local territories rather than global services. BBC's move to in effect put BBC THREE commissions on-demand is one such aspect. RTÉ's GAA GO product and BBC's International I-Player are also part of this shift.

I don't think anyone is disagree with the move towards online from broadcasting but it will take time, TV isn't dead just yet.

I foresee many niche channels closing down, you'd wonder why so many exist, I don't understand the market for the CBS UK/ True Entertainment type channels. But then Sharknadoo is also available on Netflix!

icdg

Sam Russell wrote: »

I have basically given up on streaming due to its clunky slow switch on and its heavy advertising load. It has also proved to be unreliable - breaking connection for no reason.

I would not to rely on it for main TV reception.

I must say, I don't know how they do it, but Netflix streaming is always of extremely good quality with zero buffering once the programme starts playing.

Elmo

icdg wrote: »

I must say, I don't know how they do it, but Netflix streaming is always of extremely good quality with zero buffering once the programme starts playing.

Agree other On-Demand services should consider buying Netflix software if available.

Capt'n Midnight

Part of the problem for the providers is that AFAIK in the past cable companies didn't get much of a cut from the extra subs for pay channels.

So if UPC aren't getting a decent slice from the premium channels then it may not be a huge issue for them if someone changes to a BB only package. They may even make more if someone switches to a more expensive BB package.

SKY are subsidising BB so they might think differently.


There are programs out there where you wait a few minutes for the buffering to start because while you are watching it's torrenting the rest.

perhaps something similar would work with live streaming , not live but for the last few minutes as peer to peer might or might not solve some server side streaming issues ?

munchkin_utd

Sam Russell wrote: »

I have basically given up on streaming due to its clunky slow switch on and its heavy advertising load. It has also proved to be unreliable - breaking connection for no reason.

I would not to rely on it for main TV reception.

depends on which service you use.

As i am abroad, I have a few paid subscriptions for bits and bobs (that cant be mentioned here) along with a GAA Go subscription (which can be mentioned) and everything is ad free and somewhere between good SD quality and not far off HD. Startup time not a problem either.
One of the services has even 2week playback for all British/ German/ French FTA channels, and again thats prety much instantly available for playback, which is the reason I use it for more4 rather than the channel 4 service directly itsself.

And that fits in nicely with the actual thread in question, as now I watch little enough live TV because the streaming service and recording facility are so good.
Having 2 small kids also means that watching TV when the broadcasters want you to is not always practical (except for shaggin cbeebies ! )

Elmo

What's GAA GO like? Better than RTÉ Player?

I swindled the NSA

Elmo wrote: »

The days when RTÉ2 (traditional broadcasters) could get away with a 3 month gap for a US show is long gone (prob since LOST's arrive which is now 10 years ago), but to now have a situation where Gotham is on 3 months after its release in the US and then not to be able to have it as a boxset up to the end of its run is just madness how can tradition TV broadcasters compete with that type of deal?

Ive never got why there is such a delay in getting US shows on this side of the Atlantic.

It might have been justifiable in the very early (1950's) days of television when programming was distributed on 16mm film but why does the practice continue to this day ?

STB.

I swindled the NSA wrote: »

Ive never got why there is such a delay in getting US shows on this side of the Atlantic.

It might have been justifiable in the very early (1950's) days of television when programming was distributed on 16mm film but why does the practice continue to this day ?

Rights! Nothing more.

The rights holders sign contracts with the broadcasters for regions. The US shows first concentrate on their home market. Then its distribution is dicated by target population. Their intention is to maximise income and if that involves signing up to exclusive pay operators in the UK first, that has a knock on effect.

Regional releases of DVD's follow the same pattern. Of course the delivery of box sets via on demand services and piracy have had a massive effect on how the preferences of how the new generation view progamming.

icdg

Elmo wrote: »

What's GAA GO like? Better than RTÉ Player?

AFAIK it is operated by RTE so presumably runs on the same platform?

I swindled the NSA

STB. wrote: »

The rights holders sign contracts with the broadcasters for regions. The US shows first concentrate on their home market. Then its distribution is dicated by target population. Their intention is to maximise income and if that involves signing up to exclusive pay operators in the UK first, that has a knock on effect.

Would make sense if all US imports got first airing here on pay TV and the pay channels here got them within a week of first showing in their home market but neither seems to be the case.

Piracy and VPN's will put paid to their broken business models eventually.

Vic_08

I swindled the NSA wrote: »

Ive never got why there is such a delay in getting US shows on this side of the Atlantic.

It might have been justifiable in the very early (1950's) days of television when programming was distributed on 16mm film but why does the practice continue to this day ?

STB. wrote: »

Rights! Nothing more.

The rights holders sign contracts with the broadcasters for regions. The US shows first concentrate on their home market. Then its distribution is dicated by target population. Their intention is to maximise income and if that involves signing up to exclusive pay operators in the UK first, that has a knock on effect.

Regional releases of DVD's follow the same pattern. Of course the delivery of box sets via on demand services and piracy have had a massive effect on how the preferences of how the new generation view progamming.

None of that has anything to do with the delay in international broadcasts.

New US tv series are mainly sold before they begin airing. They are sold individually or as part of package deals.

Overseas broadcasters traditionally would start showing US series in Jan-Feb where they would have started in Sep.

The main reason for this is that US networks do not air new episodes weekly, a 22 episode series will be aired over 35-40 weeks with old episodes or other programmes airing in the timeslot every few weeks. This has never been popular here where people expect new episodes every week. It is becoming more commonplace now because of the effect of illegal downloads.

Some broadcasters have tried to closely follow US air dates, particularly with popular shows but it generally hasn't been well received. SKY did it with ER at the height of it's popularity for example.

A secondary reason why broadcasters hold off is because of the propensity of US broadcasters to cancel shows mid-series. There will usually be clauses in the contracts that the overseas broadcaster will not have to buy a series if it does not get a complete run or they will be sold at a much reduced rate as a time filler (RTE used to buy bucketloads of these and run them out in the early hours). No broadcaster wants to waste resources in promoting the next big thing out of the US only to have it disappear after a handful of episodes. Waiting until Jan/Feb they will usually know if the US network has committed to a full series or not.