TV Anywhere, or TV Nowhere?


TV – A fascinating article appeared in early November in the New York Times titled For Millennials, the End of the TV Viewing Party. The author talks about the early days of television, when family and neighbors would gather around to watch TV as an event.

 The Ed Sullivan Show, The Wonderful World of Disney, The Carol Burnett Show and Laugh-In – all of these epitomized appointment television back in the 1950s, 1960s and 1970s.

Today, the landscape is very different. Aside from true events like the Super Bowl or nationally-breaking news like the 9/11 attacks, “watching TV” is increasingly becoming a one-on-one experience. I put quotes around “watching TV” because its definition has become quite a bit cloudy of late, thanks to a proliferation of streaming services, the growth in popularity of tablets and larger smartphones, and the phenomenon known as “binge viewing”.

The author goes on to quote college students who see no point in putting a television in their dorm rooms (“When I walk into a dorm room and see one, my first thought is, it’s unnecessary, almost a waste of space”) and who have no interest in buying a big screen TV, coming up instead with ingenious, low-price solutions for viewing that include old computer monitors with USB speakers and Apple TV or Roku boxes.

This quote from the story sums up quite nicely how our view of television and its once-important role in our daily lives has changed completely: “Just as the landline went from household staple to quaint anachronism seemingly overnight during the last decade (acquiring a profoundly uncool air along the way), the television set has started to look at best like a luxury, if not an irrelevance, in the eyes of many members of the wired generation, who have moved past the “cord-cutter” stage, in which they get rid of cable, to getting rid of their TV sets entirely”.

Others are quoted in the story as having given up on TV altogether after the 2009 digital transition, or traveling several miles to a friend’s house to catch up on Doctor Who episodes. An event producer mentioned in the story prefers to binge on Netflix programs while traveling, using his trusty iPad. For these folks, there is no such thing as appointment television – it’s now something reserved for killing time.

Millennials even share passwords to log into network streaming sites and catch up on shows they’d never have access to normally, having eschewed cable and satellite TV. This is one of the reasons that HBO, CBS and Showtime have all announced new streaming services that will launch in 2015 in an attempt to capture some of these “cord nevers”.

Why should anyone be concerned about the viewing habits of this group? Simple: They fall smack into the most desired advertising demographic. But trying to get large groups of them in front of a TV screen is like herding cats. A content provider needs to support not only traditional program delivery (off-air, cable, satellite, fiber) but streaming and digital downloads at the same time. And the rating services are having conniptions trying to track the audiences for these “over the top” services. (See my earlier note about sharing passwords.)

Yes, there are still plenty of people watching “traditional” programs on “traditional” televisions these days. But there has been a slow and steady decline in TV sales for the past three years, and by all indications, that trend is going to continue when 2014 is all done and tallied-up. Combined with a decline in computer sales – and a slowdown in tablet sales, thanks to phablets – you can see why many of the powerhouse Asian CE brands are missing their sales and profit forecasts for 2014.

As I detailed in my previous post, pay TV subscriptions actually declined in 2013 and will probably see a drop-off again this year. You can bet those doggone Millennials are a big part of the reason why. But so is faster broadband, which cable companies are providing to guard against losing subscribers to competitors on the same telephone poles. Ironically, as internet speeds go up, more subscribers are inclined to dump traditional TV channel packages to save money. In a strange way, the Comcasts and Cablevisions of the world are undercutting their business models by enhancing them!

So what does this mean for the traditional television business? We know prices are collapsing and will continue to do so as China ramps up production. Even Ultra HD TV prices are falling faster than a stone: 55” models from the top brands that cost well over $4,000 last fall are now down to $1,500, thanks to the likes of Vizio and TCL. By the middle of January (the peak time for TV sales, prior to the Super Bowl), I wouldn’t be surprised to see 55” Ultra HD TVs going for less than $1,000, with 2K same-size sets well under $500.

Consequently, televisions are not going to be such a big deal at CES in two months. Yes, you’ll see plenty of them in the convention center, but you’re just as likely to see white goods (refrigerators, washers, and dryers), vacuum cleaners, microwaves and even beauty supplies featured prominently in the same booths. (And let’s not forget mobile phones, although that market isn’t providing much good news to manufacturers these days.)

(Hmmmm…On second thoughts, maybe I should have titled this piece “TV, Somewhere”…) – Pete Putman