The Future Of Television
A look at the future of television is provided by the NBA's recently concluded media rights agreement, which combines direct-to-consumer video and broadcast television. Getty Images The NBA's new media rights agreement is indicative of the medium's future direction and continues to evolve. Photo by Adam Glanzman. The NBA changed its media partners last month from TNT, which had been televising games since 1988, to NBC/Peacock and Amazon Prime Video. After the 2035–36 season, the $77 billion contract that covers 11 years will expire. As a broadcast network, NBC is seen by 125 million households in the United States. According to reports, Prime Video has 200 million subscribers worldwide and 115 million in the United States.
The financial difficulties that the once-profitable regional sports networks have been facing are another indicator of the direction that television is going. AT&T SportsNet, which operates in four markets, left the RSN business last year. The largest RSN, Diamond Sports Group, announced the discontinuation of the RSN and replaced it with broadcast stations and a direct-to-consumer offering. The expansion of digital antennas and the expanding availability of NextGen TV are helping local stations, which have a significant presence in television markets, succeed. Also, more and more people are using streaming services to watch live sports.
A brief summary of the state of broadcast, streaming, and cable television is provided below.
Cable In May 2011, the number of households with access to cable programming reached its peak, with more than 105 million households having subscribers, or nearly 91% of TV households. With the rise of cord-cutting, the percentage of homes has dramatically decreased since then. Today, just 57% of households with televisions subscribe to cable, or just over 71 million households. Additionally, the rate at which households stop paying for cable television has been rising. A record five million people canceled their cable subscription in 2023, up from 4.6 million in 2022, among the largest cable programming distributors.
The majority of cable networks' audiences have been plummeting as a result of declining subscriber numbers. Only three cable networks had an average of more than one million viewers during prime time in 2023. In contrast, 19 cable networks had an average viewership of more than one million in 2013. The loss of audience is not slowing down. Cable had the lowest share of TV usage to date, at 27.2%, according to the June 2024 Gauge report from Nielsen. Cable's share had increased to 40.1% in June 2021 from 30.6% in June 2023.
Cost and alternative viewing options like streaming are two of the most frequently cited justifications for cutting costs. Pay-TV service providers made $85 billion in 2023, down from $92.4 billion in 2022. Cable television advertising revenue has also been declining. S&P predicted that cable ad revenue would reach $22.4 billion in 2023 and will fall below $20 billion in 2027 due to annual declines. A carriage fee agreement between Charter Communications and Disney was hailed as transformative last year. Disney+ with ads will be available to Spectrum TV Select subscribers of Charter under the new agreement. ESPN+ is also available to Spectrum TV Select subscribers. Additionally, Disney granted Charter permission to discontinue cable networks: Baby TV, FXM, FXX, Disney Jr., Disney XD, Nat Geo Mundo, and Nat Geo Wild
Streaming is the video platform that is expanding at the fastest rate. According to a Park Associates survey, 89% of American households have at least one video streaming service, significantly more than cable TV. Better shows, the ability to binge on shows, and the ability to watch them on demand are some of the reasons streaming video is growing in popularity.
In June 2024, the Gauge Report from Nielsen found that streaming accounted for a record-high 40.3% of TV usage. In addition, the highest level of streaming consumption in a single measurement week was recorded by Nielsen for the week of July 1 across all streaming platforms, with over 313 billion viewing minutes. With a record-high 9.9% share in June, YouTube remained the most popular video platform—a position it has held for 17 consecutive months. YouTube claims that 150 million Americans watch it each month. With a share of 8.4% of TV usage, Netflix came in second place.
The rise in web-connected smart TVs contributes to the rise in streaming usage. The typical viewer today watches more than 20 hours of streaming video per week. Over 70% of TV homes in the United States, according to Nielsen, have at least one smart TV, up from 62.3% two years ago.
Streaming with ads supported is one of the fastest-growing market segments. 69% of CTV users in the United States prefer free ad-supported streaming television (FAST) programming over a paid subscription, according to a survey conducted by LG Ad Solutions. According to the survey, 53% of respondents spend more than two hours per week accessing FAST applications, and CTV has become the ad-supported media channel with the fastest growth. CTV advertising revenue is expected to surpass $30 billion this year, surpassing cable's. In 2027, advertising revenue is expected to reach $42 billion.
There are issues with streaming. Because there are so many options for watching streaming video, one of the things that frustrates users is how long it takes to find a program. According to a study conducted by Gracenote at Nielsen, viewers spend an average of 10.5 minutes selecting a show. AI will be used to assist in program recommendations, according to plans announced by Amazon Prime Video. Another issue has been rising costs; 45 percent of subscribers have canceled streaming services due to high costs. to help stop subscription growth. There are now a number of discounted bundle services that can be purchased.
Broadcast According to a CivicScience survey, traditional or digital in-home antennas are the most popular method of television viewing today. Antennas are currently used by 30% of adults in the United States, allowing households to receive free local broadcasts over the air. 17% of households, according to the survey, use their antenna "often." Millennials (those between the ages of 25 and 44) use it the most. Additionally, broadcast stations groups have launched dozens of over-the-air digital multicast networks (also known as "OTM") since 2009, when digital transmissions replaced analog ones. diginets"), which are accessible through digital antennas. A digital antenna of good quality may cost less than $100.
The FCC approved rules in November 2017 that allowed local broadcast television to move to an IP-based standard for transmitting signals over the air. The FCC referred to the upgrade as ATSC 3.0, but it is more commonly known as NextGen TV. The implementation has been voluntary, market by market. An ATSC 3.0-compliant television, an in-home antenna, and either a streaming subscription or Wi-Fi are required to access NextGen TV.
56 television markets will be able to watch the Olympics in Paris on NextGen TV with High Dynamic Range (HDR). An estimated 73 million television households are located in markets where HDR-enabled NextGen TV signals are transmitted. HDR is a technique that lets you see more of the content in very bright and very dark videos.)
A greater variety of content, including multiple video streams and on-screen interactive apps, as well as the possibility of viewing video content on mobile devices and automobiles, are among the additional advantages of NextGen TV. In the United States, 12,000 NextGen televisions are purchased each day.
Bill Harvey, an analyst in the industry, points out that many of the streaming shows with the highest ratings originated on broadcast or cable and that the threat of linear TV's demise has been greatly exaggerated. According to an article in the Nielsen Gauge, "The 6 billion minutes Young Sheldon garnered in May 2024 were split almost exactly in half between traditional linear channels and streaming," he cites the Nielsen report. Its success on streaming platforms was fueled by its success on linear television, and vice versa. Harvey continues, "Streaming is not competing with linear; this is the way that programmers who stay ahead of the puck will rebuild an even stronger television business by coordinating all delivery paths." It is expanding linear's reach. The smaller commercial loads in streaming will eventually equal the yield per viewing minute of the more heavily commercialized non-addressable linear when the ROI benefits of addressability are fully utilized. The networks won't care which delivery method a viewer chooses at that point because they will all be nearly equally profitable. But not if linear switches from scripted series to reality shows that cost less, which would bring the feared future doom scenario to pass.
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