TV is Not Dead. But, These Major Moves From FANG Will Change It Forever.

Dec 06, 2017

As widely reported, the death of the television as the centerpiece of entertainment in the American home has been greatly exaggerated. The death of the traditional system of broadcasting programs over the air and via cable however, may be imminent.


Of course, we are all aware how much the act of watching TV (or what we now call TV) in today’s world has changed. OTT, Retina displays, cord cutting, skinny bundles, and a studio system that has learned to take advantage of a splintered, yet effective, distribution model have all combined to alter the way we consume quality programming forever. But under all of these changes in viewing behavior are some metrics that rightly scare TV networks and cable providers.


The good news for the ‘traditional’ TV industry -- TV ad spending will continue to rise for the next 4 years and beyond, according to eMarketer. What is dropping, however, is the percentage of the overall advertising market that this TV ad spend represents. By 2021, TV will make up just 29.4% of media spend, down from nearly 35% in 2017. TV as a traditional ad medium is losing share while digital ad spend, video consumption time and the number of places people view content is on the rise.


Driving this change are a group of digital wolves, aptly titled FANG (Facebook, Amazon, Netflix, Google); a foursome eager to continue their assault into the world of television. As a threat to traditional television they have a great deal going for them, primarily their collective chokehold on our daily lives, and not many experts project a deviation from this anytime in the near future.


To expect consumers to be willing to move to these platforms for all of their viewing needs is quite reasonable; the transition from going to Facebook to post a status and going to Facebook to watch a show is relatively minor. Each FANG member has recently introduced its own challenge to traditional television: Facebook has created a partnership with Nielsen to measure cross-platform brand lift, Google has launched YouTube TV offering cable-free live TV, Amazon is developing a free, ad supported model for Prime and Netflix continues to clean up at the Emmy’s on what is becoming an annual basis.


What does this all mean? It means consumers will have more choice, digital powerhouses will have more power and traditional TV platforms will face more headwinds. However, as long as the studios continue to churn out amazing content (oh, and some version of net neutrality stays intact), people will gravitate towards better, faster and cheaper ways to view their favorite shows eschewing the system in favor of efficiency and ease.