The Golden Age of Choice and Cannibalization in TV http://tinyurl.com/29h5dov My third GigOm referal today!
Mike Hudack, CEO of Blip.tv writes as guest blogger at GigOm about how audiences are fragmenting and where the opportunities lie. It’s a little long but it’s worth reading in its entirety.
Other than live event programming like the Super Bowl, however, the days of a single television show pulling in the vast majority of American TV households are over. The broadcast networks are long past their peak. Their audience — in absolute numbers, not relative numbers — has been shrinking since the early 1980s.
and much later
People often say that the web video industry will not come into its own until it creates a hit. This thought is, quite frankly, wrong. The cable TV industry has clearly come into its own. And it’s done this without producing a single hit on the order of a network TV success. Yes, the network television business is meaningful, but it no longer produces the hits it did just a few years ago. This year’s slate of network series premieres was the first to pass without a clearly defined “hit” show. That’s no accident. The networks are lost.
Media naturally trends towards fragmentation. As capacity increases so does choice. As choice increases audiences fragment. When given a choice people generally prefer media that speaks to them as individuals over media that speaks to the “masses.” While American Idol remains strong, the trend is clear. Americans have been abandoning broadcast television in favor of cable’s niche shows for thirty years.
For me the key takeaway is that it took Cable 20-30 years to dominate over broadcast, so it’s unreasonable to think that the distribution (and therefore democratization) revolution of the Internet is going to happen in just a couple of years? It might, but I think it’s safer to assume that long term “Internet TV” will be dominant. Broadcast Networks might still be relevant for sports and other live events, while cable’s best bet is to become an intelligent network provider. (Yes, I am saying that in the world of IP-based distribution why do we need someone else negotiating for “channels” that we may watch, when we can go direct to the source of the programming and watch it there.)
This will be a great opportunity for Producers who understand how to make a direct connection with their audiences and can package up the whole business and distribution package themselves. There’s got to be more profit (or overall lower budgets) if we remove one entire layer of distribution – the channel aggregators (TV networks, Cable networks, etc). Those Channels that focus on original programming will transition just nicely I imagine (restrictive legacy contracts not withstanding).