As we come towards the end of 2016, it's interesting to look at what is happening in the world of Television, and how the perceived death of the traditional television service is being heralded by some industries, (particularly the newspaper business), without taking account of the old adage that those who live in glass houses shouldn't throw stones....
The Irish Independent recently ran a report titled Why can't the TV industry admit we've changed habits?
http://www.independent.ie/business/technology/why-cant-the-tv-industry-admit-weve-changed-habits-34280695.html
As with all reports, I don't think it's a simple equation. It's a fact that consumers are consuming media in may more ways than in the past, and this is reflected in viewing figures for linear TV. Online services, such as Netflix and Amazon have changed the way a lot of the drama and episodic TV is consumed, but these services do not, to date, provide the real-time content that is still the biggest draw, such as sports, news, and a lot of the entertainment genres- (X-factor, The Voice, Strictly, etc.)
The Rugby World Cup, All-Ireland Finals, Olympics, and even the recent Conor McGregor UFC fight are all huge draws for the audience, and remain largely the domain of network TV, albeit with online viewing options available. The Late Late Toy Show is still the biggest show of the year in Ireland, with almost half of all viewers tuning in. So the fact remains that the biggest viewership by far remains on the traditional TV platform, albeit not to the same extent as in days of old.
meanwhile, improvements in technology- such as HD, UHD, and surround sound all contribute to enhancing the TV experience. and although these are not the exclusive domain of traditional broadcasters, they remain the driving force behind these innovations. Most consumers still like to settle down in front of the box in the corner, regardless of what service they are viewing.
There are other factors at play too- network television is still the biggest commissioning agent for content. And although we are seeing a lot more original content from online providers, the total amount of content they are producing represents a tiny proportion of the available content globally. 24/7 TV- of whatever type- is a hungry mouth to feed, and the relentless need to fill content suggests that the still much bigger network audience will be needed to fund this production for many years to come. Wall to wall reality TV just isn't going to cut the mustard!
Demographics definitely play a big part in the viewership, with the 18-24 demographic displaying the biggest decline- a recent report by Marketing Charts
http://www.marketingcharts.com/television/are-young-people-watching-less-tv-24817/
clearly indicates the decline in traditional viewing among this group. However, there is evidence that as these viewers move into their mid-twenties and beyond, and settle down with houses, families, careers, and all the associated responsibilities and pressures on time, they tend to return to the easy option- turn on the box and see what's on. It takes effort to search online for something to watch, and although we all do it, sometimes you just want to vegetate and let someone else make the decision for you.
That's not to say all is rosy in the garden. There is no doubt that alternative platforms- be they mobile, online, even gaming- have hugely fragmented the viewing audience, and the glory days of 20M+ viewers for an episode of Coronation Street will never return- but equally it's not true to say that broadcasters don't recognise this fact, and haven't taken steps to participate in the new world of media. The BBC's iPlayer is the biggest VOD content provider in the UK, and RTE's Player is the biggest provider in Ireland. The challenge is to find a way to monetise this. Viewers are quite happy to pay a Sky TV subscription monthly, and subscribe to Netflix and other services. But they baulk at paying a TV licence which costs no more than 2 months of the average subscription service, and there is strong resistance to paying a subscription for broadcaster's own VOD services.
In many ways, this echoes the challenge facing the newspaper industry- the migration of news to online has had an event greater impact on newspaper publishing, and this industry has still not managed to find a way to convince its readership that they should pay for a subscription for online content. But someone somewhere has to pay the journalist, and this is a tough circle to square.
The fact remains that every industry has to adapt, find new ways, and move with the times. Wells Fargo don't still run stage coaches across the US, and Sony no longer manufacture VCRs. But these businesses have found new ways to serve their markets, and the global media business- which includes TV, radio, newspapers, and online services- will find their level. No doubt some will fail, and some will become mere shadows of their former selves. But there will be newer, smarter, more agile contenders to take up the pace, and these will take their share of the audience in ways which in some cases we don't even understand yet.
Back in the '70s, record companies used to put a warning on LPs (that is- those black vinyl discs that went out of fashion for a while-) "home taping is killing music", referring to the availability of the Compact Cassette recorder. Well, the reality is that it didn't. Home taping augmented the record business, and although the number of albums or singles might now be a lot smaller than in the glory days, the fact is that even today, quality content will find it's audience, on whatever platform it's delivered. And yes, vinyl is the biggest growing sector of the music business.....
The future is likely to remain a hybrid one, with both linear and on-demand services, and viewers using each service for specific content types. But the days of broadcasting being a licence to print money are long gone. At the same time, the bulk of the population still expects to see a quality service from the networks, and good content is the driving force, regardless of the platform. Just as the Hollywood film industry had to adapt to smaller numbers in the cinema, and embrace the advent of the DVD, so TV companies will have to adapt to a world where the consumer dictates the medium, not the provider.
And consumer choice is a harsh critic, but will reward the innovator. Ultimately this has to be a good thing, whatever service it's delivered by.
Kevin Moore is Managing Director of Eurotek Ireland Ltd., a leading broadcast systems integrator and technology provider based in Dublin, Ireland. www.eurotek.ie
