With the growth of podcasting, broadcast radio is just begining to feel the impact of the “on-demand revolution” on listening. We saw signs of this in our Techsurvey last year; this year’s edition addresses how podcasting listening affects “real-time” broadcast usage, and we’re looking forwarad to unveiling the results at the Worldwide Radio Summit in L.A. in May.
But no matter what it shows, it will pale in comparison to what our friends in television are enduring. From the beginnings of TiVo, television has felt the scourage of on-demand. From recording shows to skipping through commercials, the DVR was just the opening salvo in television’s on-demand revolution. And in today’s world where seemingly everyone is watching Netflix, while more young people are “cutting the cord,” TV viewership is under siege.
On-demand usage in television may always over shadow radio’s levels. But our Techsurveys have shown a direct correlation between those who watch TV on-demand and also listen to podcasts – and vice-versa. Once you can listen (or watch) what you want, when you want to, and on whataever device of your choosing, it’s hard going back to waiting until 7pm when “Wheel of Fortune” comes on or when ALT 97.5 promises the exact time they’ll premier the new Twenty One Pilots song.
Three stories in just the last week underscore the slippery slope TV is on. Here’s the evidence that suggests there’s trouble in TV Land. (Radio executives would be wise to not dispassionately watch this hot mess.)
Exhibit A is a Bloomberg story by Lucas Shaw, boldly suggesting the TV business is in trouble as advertisers increasingly bail out to digital platforms like Google and Facebook.
Pointing to an advertising economy that’s growing, Shaw points to a “no growth” scenario for traditional media companies – TV and radio included. Social media, streaming services, and cord cutting are conspiring to erode TV’s long-time hold on the market.
The data shows a 10% viewership drop last year among 18-49 year-olds, exacerbated by falling sports ratings – including down numbers for the NFL. Sports was expected to be the “firewall” that would keep viewers tuning into commercial broadcast television. But these days, all bets are off.
Exhibit B involves the aforementioned Netflix, and the theory it’s costing traditional TV billions in lost advertising revenue as more viewers gravitate to sbuscription streaming services.
Media Post says a new nScreen Media analysis estimates somewhere between a $3-$6 billion ad shortfall for TV. Analyst Colin Dixon says the average Netflix viewer in the U.S. misses somewhere in the vicinity of 35 30-second commercials each day. Over a year, we’re talking more than 5,7oo missed spots.
And Exhibit C is the most interesting because it’s about television getting proactive, rather than enduring attacks as in the earlier mentioned stories.
So, here’s the big news: NBCUniversal says it will reduce its commercial load by 20% across all its networks. That includes NBC, of course, as well as ScyFy, USA, and others. During the prime time hours, commercials will be slashed by a more modest 10%.
The Wrap quotes NBCUniversal’s Linda Yaccarino (right) who says the move is all about making the “experience better for viewers.” And that includes consumers, marketers, and the industry.
Not to be outdone, Fox Network Group’s head of advertising sales – Joe Marchese (left) – announced yesterday his goal to cut TV ads to just two minutes an hour by 2020.
(Maybe KNDD’s “Two Minute Promise” is catching on.)
In a Wall Street Journal story, writer Alexandra Bruell suggests the obvious – with only two minutes of ad inventory, Fox would have to raise it rates considerably in order to avoid financial disaster.
But another Fox sales executive, Ed Davis, told the Journal that perhaps the real challenge will be to alter the messages and their purpose. That will require a whole new way of thinking about marketing on commercial television:
“Creating a sustainable model for ad-supported storytellling will require us all to move.”
And move quickly and strategically. Whether Fox follows through on this aspirational goal and puts it into practice remains to be seen. But both NBCUniversal’s declaration and the Fox wish are both sure signs the TV industry has finally gotten the message.
When it comes to advertising and the viewer experience, television execs are going to have to rethink everything.
For the moment, radio is still watching from the sidelines. It won’t be long, however, before the same pressures impacting TV will be in the front windshield. It will be time for radio to make its move.
See Spot run.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,000 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.