Network TV Is Dead. Long Live Network TV.
Broadcast TV survives and adapts in a streaming age. Context Collapse #154
In this issue: LOL Streaming Won / People Keep Watching Broadcast TV/ Microdemo Futures
The bad news: Network executives and advertisers increasingly view prime-time network television—whether viewed with an antenna or via cable—as a time-consuming anachronism with depressingly little revenue.
The good news: People keep watching prime-time network tv.
I’m thinking about network television because (like a lot of people) I just watched the Emmys. More specifically, because I work in marketing and advertising. Even more specifically, I’m a 41-year-old guy who works in advertising consulting whose wife has a senior-level role at an advertising agency whose entire adult working life has been spent in journalism, advertising or marketing. That is to say that I’ve stared at a metric fuckton of television screens for work and pleasure.
More specifically, I read a newspaper article.
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LOL Streaming Won
So… yeah! Joe Flint over at the Wall Street Journal wrote an article called “TV Networks Have a New Role: Farm Teams for Streaming Shows.” His thesis is a little more detailed than that… it’s basically that viewership for primetime television has plummeted and that networks now care much more about streaming.
Flint, who has some good contacts because he is a reporter for the Journal, collected some damning quotes.
“You need to go where the audience is,” said former CBS Entertainment President Nancy Tellem. “The consumer is now in control, not the networks.”
“The relevancy of broadcast TV has been declining for years,” said Jeff Gaspin, a former top executive at NBC who is now a producer. “I suspect nobody is making money in prime time.”
Traditional TV, says former Disney Chairman and CEO Robert Iger, is ‘marching to a great precipice, and it will be pushed off.’
The parent companies of ABC, CBS NBC and Fox don’t disclose financial results for their broadcast networks, instead combining them with other television operations.
The article specifically shows television mainstays (surprising ones!) like Days of Our Lives and Dancing With the Stars going streaming only.
And I mean… I’m writing this on Substack. I started out writing for print newspapers and magazines in another media era. I can look out the window for my office and see televisions tuned to Netflix and Disney + home screens.
The streaming services won, and won handily. But there’s only one problem…
People Keep Watching Broadcast TV
Massive portions of America still watch television on broadcast or basic cable. They’re just not the demographics traditional advertisers favor.
According to the Pew Research Center, only 77% of American adults have broadband at home. That number drops to 72% for rural residents. Only 65% of Hispanic American adults have broadband at home. Only 64% of Americans over 65 of any ethnic or economic background have home broadband. Only 57% of Americans in households that earn less than $30,000 of any age or ethnicity have home broadband.
Lots of Americans fit these brackets. They’re the core audiences watching broadcast and basic cable television. But even more people have broadband but predominantly watch basic cable or broadcast.
There are plenty of Americans who out of habit or preference have broadband but prefer to watch television on other platforms. There are plenty of Americans who have unreliable or slow internet connections and prefer to watch other cable or broadband out of convenience.
This is one reason for the massive growth of digital subchannels. With digital broadcast television, multiple subchannels can share the same channel. This is how you get channel 7.1, 7.2, 7.3… on your home digital antenna.
These digital subchannels, which are free over-the-air, offer value to broadcasters who mainly repackage old programming for airing alongside ad inventory that allows them to make a profit on old shows that would otherwise be unaired. They can also be created around inexpensively-generated new content, similar to the UHF stations of yesteryear.
Van Duke of Playbox Neo, a company that provides software for television channels, wrote in industry publication TVNewsCheck about how broadcast television is repackaging old shows:
While digital subchannels have been around for more than 10 years, they’ve recently increased in popularity with several multicast networks launched just last year including Tegna’s Twist, E.W Scripps’ Doozy and Defy TV, Nexstar’s Rewind TV and Nexstar and SportsGrid Inc.’s SportsGrid Network.
Multicast networks can offer a targeted demographic that potentially generates increased revenue and stems the tide of cord cutters. Content that draws an audience will also attract advertisers, particularly when the demographic is clearly defined and fits the advertiser’s target market.
Translating into non-industry talk, this basically means that it’s easy to create digital subchannels with clearly defined audiences that you can generate advertising revenue from. SportsGrid, for instance, bills itself as “the nation’s first and only 24-hour network for the sports wagering audience and fantasy sports fans.”
In the United States, where major networks offer top-notch programming for free over the airwaves in exchange for advertisers subsidizing their programming by paying tens and hundreds of millions of dollars in ad buys, the old model is breaking down.
Microdemo Futures
“I’m a white male, age 18 to 49. Everyone listens to me, no matter how dumb my suggestions are.” - Homer Simpson
In the world of television advertising, and thus in the world of television, demographics are king.
The demographic slices that have discretionary income to buy expensive stuff and can be convinced to switch brand loyalties—and hahahahaha oh crap we have so many more microdemographics and tiny audiences that can be targeted with digital advertising with reasonably decent precision via streaming platforms these days—primarily watch television on streaming platforms. These streaming platforms aren’t just big incumbents like Netflix and Hulu; the Yellowstone media empire airs across Peacock and Paramount+ (which, incidentally, is the subject of some pretty big backstage drama between those two streamers… but that’s a discussion for another day) and we all know how Disney+ conquered the world with their warchest.
Streaming advertising is similar to digital web advertising, except that it’s much more of a wild west with fewer established big players. It’s much, much easier for advertisers to reach their desired microdemographics via streaming than broadcast or cable; this is one reason why Netflix is now all in on advertising.
TLDR: Broadcast television isn’t going anywhere, but the big advertisers are.
Other Things:
With the September 11 anniversary, memories of eating at the World Trade Center Taco Bell back when I went to Stuyvesant. I found an op-ed I wrote for Temple University’s student newspaper in 2002 about rebuilding the World Trade Center (spoiler: they rebuilt it and I went on to work for a magazine that was headquartered there). My toddler is cracking wise about New Jersey.
Until the next one.