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Photo: The TV interface of Microsoft’s Xbox One, pitched as much as a set-top box as a games console…

 

With network TV suffering and digital platforms thriving, one could be tempted to think the medium’s future lies anywhere but in the TV set.

Asking whether “traditional” US TV is “tanking”, App Market.tv offered a number of key indicators in this sense recently. “Broadcast ratings in the key 18-49 demographic tumbled by 17% during the winter months when compared with a year earlier, according to Goldman Sachs, which called the decline “the sharpest pace on record”.” Add to this eMarketer’s finding that a total of 30% of respondents to a recent survey were inclined to at least consider cord-cutting, and you have a worrying state of affairs for US networks.

GigaOm then piled on the pain: “from April 2012 to March 2013, the industry lost a total of 80,000 subscribers, according to Leichtman Research. That’s the first time the research company has ever seen subscriber losses over a 12-month-period, leading president Bruce Leichtman to this assessment:

“First-time ever annual industry-wide losses reflect a combination of a saturated market, an increased focus from providers on acquiring higher-value subscribers, and some consumers opting for a lower-cost mixture of over-the-air TV, Netflix and other over-the-top viewing options.”

 

GigaOm reminds us that Leichtman is a sceptic in this domain, having famously claimed in 2010 that cord-cutters are “really just a bizarre breed of people”…

So if people are watching less and less TV on TV, where are they watching it? Microsoft gave a massive clue as it unveiled its new Xbox One, May 21. The replacement for the Xbox 360 console — that’s already in 76 million homes worldwide — is more than just a games machine. It’s also a set-top box, offering live TV from the get-go, claims the soft- and hardware giant (cf. above screenshot, and this video of how TV will work on the console). And as if to prove its point, Microsoft also revealed that Steven Spielberg is working on an Xbox-exclusive TV series based on the Halo gaming franchise

So for the US’ biggest console-maker, TV is now just as important as gaming; and it intends to deliver both in a seamless online experience, before this year is out.

Then there’s Netflix, of course, which is becoming ever-stronger right now: tellingly, it now has more subscribers than AOL at its peak in 2002; and as AllThingsD reminded us, it still consumes a third of all US internet bandwidth each night, leaving Amazon, HBO, Hulu and even YouTube in its wake.

Speaking of the other online video giant, YouTube famously launched its first ever paid subscription offering mid-May in the US. However, the move seems more symbolic than anything else for now: not only is the content on offer hardly earth-shattering, but above all, on YouTube, a round “0% (of users) expect to pay for content”, as a scathing opinion piece on New Media Rockstars pointed out. Time will tell.

Where YouTube is still on fire is undoubtedly on two of its biggest channel-networks, Maker Studios and Machinima. In a great example of “corebiz meets new media”, the former recently hired Endemol’s former boss Ynon Kreiz as its CEO. Kreiz quickly jumped on the “YouTube is the new cable TV” bandwagon… except this time, he said “it’s even bigger!” Why?

“…because you have the unlimited capacity; everything’s global; there are very low barriers to entry at the initial stage; and, most effectively, there are advertising technologies that allow for a very targeted reach, very focused buys. It’s a dream for advertisers. So this new technology is creating a new market, really.”

 

Not forgetting Machinima: the young male-skewed YouTube network is now going massively mainstream, according to Salon.com, by giving that cherished demographic exactly what they want: “bad TV“… This shouldn’t last if the director of Alien, Blade Runner & Gladiator is anything to go by: as Deadline revealed earlier this month, Ridley Scott has partnered with Machinima, “to develop episodic sci-fi web programming.” Promising, to say the least…

So just how sustainable is all this burgeoning new activity? While SimplyZesty trumpeted that online video is the fastest-growing digital ad format right now, Variety suggested caution remains of the essence, claming “Original Internet Video Getting Big, But Still Not TV Big.” Late April, the Interactive Advertising Bureau released data saying online video now attracts 45 million US viewers per month. Seems a lot? It’s still “only 19% of all American adults, whereas according to Nielsen more than 95% of the population watches TV,” said Variety.

Still, let’s expect that 45 million to get much bigger pretty soon…

 

More industry news, as curated by the MIP Markets team, right here!


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About Author

James Martin

As Head of Social Media for Reed MIDEM, James Martin oversees social strategy and deployment for B2B events MIPTV and MIPCOM, Midem (music industry) and MIPIM & MAPIC (real estate & retail). He is based in Reed MIDEM's Paris office.

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