An Article I Didn’t Expect to Write: 3 Reasons to Be Optimistic About the TV Industry
The first step to recovery is admitting you have a problem.
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An Article I Didn’t Expect to Write: 3 Reasons to Be Optimistic About the TV Industry
Last month, WBD and Paramount wrote down their cable assets by $9.1 billion and $6 billion, acknowledging the end of the cable era as we knew it and adding an exclamation point to the tumult of the past couple of years. And even as “Survive until ‘25” becomes a popular refrain for folks in the biz, some industry leaders predict the rough waters might last even longer.
Here are a few recent predictions that have kept me awake at night:
“There was a time when we were confident that there was a floor for cord-cutting. Today, it is far less clear that there is a floor . It looks increasingly like the genie can’t, or won’t, be put back in the bottle.” - Craig Moffett of MoffettNathanson on the “doom loop” in which media companies have moved their best programming off television and on to their streaming platforms — accelerating the collapse.
“The business […] will be in a period of chaos for the next 18 to 24 months. [There will be a wave of] mergers and sales and bankruptcies and all kinds of fun things. Just look at all the companies with cable networks that have this albatross of cable networks around their necks that they have to figure out what to do with.” – Sony Pictures Entertainment CEO Tony Vinciquerra on what we have to look forward to.
“You’ll note my repeated use of the phrase ‘the Media Apocalypse.’ While some have questioned if my repeated of use of this rhetorical alarm bell is hyperbolic, there seems to be a general sense of consensus across the information-attention industrial complex that the modern Media business is at an important and existential crossroads. - , Media Cartographer and author of the popular newsletter, .
How did we get here? A quick history.
Today’s troubles stem from a paradigm formed during the heyday of cable: the experience of end users mattered less than almost everything else. In fact, for most of cable's existence, viewers were not the customers—they were the product, monetized by operators, TV networks, and advertisers. Even before streaming, cable operators were unpopular with customers, receiving lower satisfaction ratings than almost any other industry. To be fair, why invest in a better experience for customers who have no choice but to buy from you?
As streaming gained momentum, networks and pay TV operators tried to preserve the pay TV bundle with "TV Everywhere": a series of apps that were individually well-conceived but collectively provided an experience too fragmented and confusing to compete with Netflix. Meanwhile, the internet was teaching consumers a critical lesson about content. iTunes allowed users to buy a single song instead of an entire $17 CD. Google enabled them to read one article without buying an entire newspaper. In short, consumers learned they no longer needed to compromise on their preferred content or user experience. Companies like Netflix, YouTube, and Amazon thrived by putting the user experience at the center of everything. But the cable industry carried on as if consumers still had no choice.
But for the first time, there are signs that big media is learning and adapting in a meaningful way.
The first step in recovery is admitting you have a problem—to yourself or, in this case, to investors (by finally acknowledging that the legacy cable business is worth billions less than it used to be). The second step is to confront the problem and take action to fix it.
Here are 3 examples that make me optimistic the industry may be learning this lesson:
ESPN “Where to Watch.”
Recently, I wrote on LinkedIn about ESPN’s new “Where to Watch” feature, which guides sports fans to any game they want to see—even those not on ESPN. Just a few years ago, directing viewers to a competitor would have been unthinkable. But this move reflects the new reality: prioritizing a great viewer experience. And they’re right! A recent Hub study found that confusion about where to find shows is a top frustration, and viewers prefer platforms that help them locate content, even on competing networks.
NBC's New Olympic Experience.
“We completely changed the game plan internally. We ripped up the playbook two years ago. It was very scary at the time to take the institutional knowledge that we had for so long and start over.” — Jenny Storms, CMO Entertainment and Sports, NBCU
For the Paris Olympics, NBC completely reimagined how the Games are packaged and presented. Changes in production and on-air talent (like Flavor Flav and Snoop Dogg), real-time video and social media coverage, industry-first UI designs, and tie-ins with other NBCU shows and stars were bold moves, especially with NBC's experience from 17 previous Games. These adjustments catered to how viewers want to watch, and it worked: 23.5 billion minutes of Olympic content were streamed, up 40% from past Games, and Peacock gained 2.8 million new subscribers—roughly 400,000 per day.
Leaning in on IP.
Young consumers love TV, but they spend just as much time playing video games and watching short-form videos on TikTok or YouTube. This poses an existential threat to traditional TV but also offers media companies an opportunity to leverage their most valuable asset: IP, not TV. In February, Disney invested $1.5 billion in Epic Games, recognizing that consumers don’t just want "The Mandalorian" TV show—they want the Mandalorian across platforms. Big media companies, like Disney, are realizing the untapped potential of their IP beyond TV and movies, investing to reach audiences wherever they are.
Where do we go from here?
A man walks down the street and sees his friend Joe hitting himself in the head with a 2x4. The man asks, “Holy shit, Joe, doesn’t that hurt?” Joe replies, “Yeah, but it feels so good when I stop!”
If you’re in the TV industry in 2024, you’ve probably felt the prolonged sting of that proverbial 2x4, courtesy of corporate leadership. But if major media companies are finally willing to face existential issues head-on, we may be closer to the end of this recovery journey than the beginning. By putting user needs first, big media might just stop hitting itself and find relief on the other side.
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About Hub Entertainment Research
Hub Entertainment Research, which celebrated its 10th anniversary in 2023, tracks how technology is changing the way people find, choose, and consume entertainment content: from TV and movies to gaming, music, podcasts, and social video. Hub’s studies have covered the most important trends in providers, devices, and technologies since 2013. We work with the largest TV networks, pay TV operators, streaming providers, technology companies, and studios to assess the present and forecast the future.
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