Cable TV in Danger: Video Shifting to Other Platforms, Screens

Video is alive and well but the same can’t be said of the outlook for TV subscriptions. A bunch of data have come out recently that directionally confirm why cable companies should be worried about their TV subscription revenues. This week comScore reported that 100 million people in the US are watching online video daily. This is up over 40% from 2010.

Indeed, more video is being watched online via multiple devices (PCs, iPads, mobile). Simultaneously, demographic patterns are emerging that suggest in 10 years cable TV revenues will be substantially down from where they are today.

According to a summary of Nielsen research in the NY Times, younger users are spending less time with traditional TV even as they watch considerable amounts of video:

Americans ages 12 to 34 are spending less time in front of TV sets, even as those 35 and older are spending more, according to research that will be released on Thursday by Nielsen, a company that tracks media use.

The divide along a demographic line reveals the effect of Internet videos, social networks, mobile phones and video games — in short, all the alternatives to the television set that are taking up growing slices of the American attention span. Young people are still watching the same shows, but they are streaming them on computers and phones to a greater degree than their parents or grandparents do.

(Emphasis added.)

Here’s a Nielsen graphic that illustrates the shifting video/TV consumption patterns in the US:

Furthermore cable TV subscriptions are viewed as an “expendable” discretionary item vs. broadband Internet and mobile subscriptions. Consumer survey data from BIGResearch (via NRF) show this:

I can confirm that my children spend more time watching video online and on the iPad than on TV. TV to them is just another screen rather than the “first screen” of older people.

How many people believe that in a decade cable TV revenues (as an industry in the US) will be half of what they are today?

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2 Responses to “Cable TV in Danger: Video Shifting to Other Platforms, Screens”

  1. Pattison Shane says at

    Saving Cable TV services for the next decade or so can only be accomplished if the major telecommunication services reach a technical breakthrough supported by advanced and new technology. Retaining clientele nowadays amidst online video streaming services can be tough for major corporations and global leaders, but it is evident that consumption will always shift to those services which offer them the most benefits and at the least cost. This is a tricky situation and challenging times for cable TV service providers and their think-tanks need to come up with something really good to offer pretty soon, otherwise, their cause will be lost sooner than they can reconsider about it.

  2. Greg Sterling says at

    Bundling and temporary discounting has been their strategy so far. More services, better service are required. For example Comcast promotes its Xfinity Wifi network, which is garbage. But the idea is a good one as a loyalty tool. That said, they also need to reward longevity. Boost (or a similar low-cost carrier) had a program where they brought down the price of service over time the longer you were with them.

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