Monday, November 25, 2013

Television Viewing in a Major Decline

Cutbacks in print media have been a major concern of mine for some time, but now it comes to our attention that the depression in communications is spreading to, of all unexpected places, television. Across the board television. Just when we thought it was safe to back cable, comes this from Business Insider.

Seems that all television is down considerably, alarmingly for those in the industry. We talk of Fox News' domination of the cable news landscape on TV, but the numbers of the top-rated shows are lower than the population of a big city. Younger viewers and older viewers are leaving in droves, finding alternatives.

Craig Moffett and Michael Nathanson, who analyze media stocks, are quoted as saying, "The pay-TV industry has reported its worst 12-month stretch ever." That's ever, boys and girls. Five million people have cut their cable since 2010. Time Warner recently lost 306,000 TV cable subscribers and 24,000 broadband regulars.

The reason for all this? "We're at the beginning of a major historical shift from watching TV to watching video — including TV shows and movies — on the internet or on mobile devices," say Nathanson and Moffett. Every time I post something about a cable provider, network, TV station or television show, I get a lot of response, almost all of it negative. We're paying a good bit of money for entertainment every month and we're not being entertained at the levels we want.

There's also a deep suspicion of big cable companies, I've found, and much of it is deserved. Like so many oversized organizations they tend to be sloppy in customer service and billing, especially when they are taking money every month from your checking account.

It has been rare when I've gone a month without having to ask a question about a bill without getting a satisfactory answer. My dish provider, for example, charged for three months of NFL TV access at nearly $40 a month. I never ordered that. I don't even like the NFL and certainly wouldn't pay $40 a month to have it in my house. I called about that three straight months and was on the edge of discontinuing service when it was finally resolved. That leaves an impression.

I subscribe to Netflix and Amazon Prime and recently found a series I liked ("Justified") and looked forward to viewing. I watched three seasons and was gearing up for a fourth. I discovered that the fourth season cost about $4 an episode. Bait and switch is what that is. Pissed me off no end.

Nathanson and Moffett agree that price is a huge problem: "Of course, the fact that pay-TV revenue is still rising smartly is part of the problem ... We have always argued that cord-cutting is an economic phenomenon, not a technological one. ... Pay-TV revenue growth reflects rapid pay-TV pricing growth and that is precisely the problem. Rapidly rising prices are squeezing lower-income consumers out of the ecosystem."

The number of cable TV subscribers in this country is getting ready to drop below 40 million for the first time in I don't know when. That's serious for an industry in a growth mode (500,000 newbies a quarter until recently). Satellite subscriptions have remained steady because of their rural nature.

Mobile device use is, of course, growing. About 40 percent of YouTube views come via mobiles. Mobile is still a minor player, but it is a segment that's growing.

So, where do we go? Who knows? But a good guess is "somewhere else and soon."

(Chart: ISI Group/Business Insider)

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