In 1994, AOL was charging customers hourly rates for internet surfing and NBC had just launched hit TV series ER and Friends. Now, only twenty years later, the internet is in nearly every home in America, and Emmy-winning drama series such as House of Cards do not even air on broadcast television.
What’s more, internet penetration continues to grow, with 81% of Americans subscribed to the internet – approximately three points higher than cable and satellite subscribers combined (78%). With internet penetration up, the big question for broadcast companies such as NBC, CBS, FOX, and ABC these days is whether their audience will abandon them entirely.
Twenty years ago, television shows were limited by the ambition of cable and broadcast companies and the iron fist of the FCC. Policies, regulations, and boardroom politics stymied potential. Today, the online world is governed by the people who consume it. It may be a matter of time before the internet becomes completely governed, but for now, the consumer is in full control and the consequence has seen broadcast television providers discover their clients are uninterested and disengaged audience.
Even NBC’s comedic icon Jerry Seinfeld, former Seinfeld star, has found a home on the internet with his new hit show Comedians in Cars Getting Coffee. The internet has allowed artists, like Jerry Seinfeld and thousands of YouTube stars, to express themselves beyond the parameters set by executives – the benefit is a wide variety of programming catered to a variety of audiences. Remember laugh tracks, or live studio audiences? Exactly – apart from a couple of network shows, they are long gone.
In addition to changes in programming, scheduling tactics and strategies have also been forced to change. Thanks in large part to the internet and television recording, broadcast television cannot control when we watch our favorite sitcoms or drama series. In broadcast television, scheduling is critical. Broadcast companies such as ABC, CBS, FOX, and NBC used scheduling as a key strategy to drive viewership. Nights of the week and times of the day were main drivers on whether a show would do well or not.
It’s far more complicated now. Today, attracting viewers both online and on television requires complex strategies and the art of timing is more about integrating trends than it is about placing Seinfeld at the 9pm slot just before Frasier on Thursday night.
What Next For TV Broadcasters?
Rapid changes in what viewers are looking for seem to be leading traditional broadcasters down rabbit holes as they explore what works and what doesn’t. However, the needs are clear –increase appeal to younger viewers and keep older viewers tuned in.
The number of broadcast television viewers is steadily dropping year over year, and in some cases quarter over quarter. The decline is more prevalent in younger to middle aged viewers. Viewers between the ages of 25 and 34 watch an average of 27 hours of broadcast television per week, while viewers between the ages of 50-65 watch an average of 40 hours per week. Both age groups are experiencing a decline.
Even though there is a general decline in broadcast television viewing, the alarming concern for traditional television broadcasters is with the younger age groups. This decline can be attributed to many factors, such as more time spent surfing the net or playing games, or more scheduled activities after school and in the evenings.
Although there is still no risk of a serious rapid decline in broadcast television in the near future, the time to alter course might be now. It might come in the form of acquisition or organic ingenuity, but one thing is certain: traditional television broadcast companies will need, for their own survival, to re-gain control of video entertainment in American households.
There are a couple of obvious strategies that broadcasters can pursue. For starters, they can begin to monopolize rights, systems, and networks. It would require a lot of capital and more than a little legal wiggling, but it’s possible that could be an option. The other? Win hearts.
If television broadcasters wish to regain the loyalty of television viewers, specifically younger ones, they will need to do something special – launch a new and innovative product or service with appeal and convenience. When Apple launched the iPod, it introduced a product that conveniently stored music and appealed to a younger audience. It is this type of breakthrough innovation that broadcast television companies might need to explore if they wish to rebecome what they once were.
There are three key areas in household video entertainment that should matter to companies like NBC, CBS, ABC, and FOX – technology, programming, and advertising. Advances in technology will be critical for closing the gap between television and the internet, something that has not quite been perfected just yet. If television broadcasters are serious about reinventing how we watch television, then investing in technology is critical.
It might need to come in the form of advances in 3D, interactive television, and maybe even new hardware and operating systems that integrate video surfing, television series, and movies. Programming will need to be customizable to viewers. A “one-size fits all” approach does not work as effectively today as it did in the past. A stronger emphasis on giving viewers their personal preferences will be key to attracting a younger audience.
Convenience will also be critical, and that will likely mean not having viewers invest too much of their time in setting up, surfing, or loading their favorites. Advertising will also need to change. 30-second commercials will not work as effectively with a distracted audience who have options. This does not mean there are fewer advertising opportunities. It actually means there are more micro-opportunities within a target audience.
But if history repeats itself, broadcast television might take a more hostile approach in this innovative process– one that involves buying internet companies, television providers, and hardware companies so it can take aggressive action on the things that hurt them the most. A few potential, and pretty crummy moves: limiting rights on PVRs, obligated commercial viewing, blackouts, and even once again pursuing pirates with copyright lawsuits.
Companies like Netflix have already taken aim at broadcast television, and it’s only a matter of time before more start-ups begin looking for ways to steal customers from the declining broadcast industry. Perhaps, down the line, the radio spectrum dedicated to television will be taken and used as part of a new wireless broadband standard. Inevitably, the television industry’s future will be a case of demise, or of survival driven by pioneering. It's a certainty that today’s model of broadcast television has no place in our future. All that remains to be seen is how soon the current model becomes completely irrelevant.