The Decline of TV

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

The Decline of TV

DSLReports writes that the Average Cable Bill is now $99, Up 39% Since 2010! Up 9% from last year!

Most of that increase is due to about 5 companies charging a premium for content -- and packaging channels that no one wants with the 1 channel viewers do want. [That is why a la carte channels will just not work. And it tops out with ABC/ESPN/Disney corp charging $6 per subscriber for ESPN - and the cableco has to carry all 7 ESPN channels.]. But not all of it!

"According to the latest annual survey by Leichtman Research Group, 83% of U.S. households subscribe to cable, down from 87% in 2010." [Yahoo]

It won't be Netflix or VZ's new mobile go90 video service that kills TV. It will be 2 things: (1) Millennials can't afford it or don't find value in traditional pay TV; and (2) TV ad spending is declining at a rate of 3% pr year, according to WP.

Why do you see the same ads ad nauseum on TV? Fewer advertisers spending fewer bucks on ads. That model can't last for long. The content providers are used to making money on cable carriage fees as well as on ad revenue. These stodgy companies are slow to change - and adopt to what is happening in the marketplace. They are slower learners than the music industry who got Napster-ed; the movie industry that made claims that piracy was killing them (not that they were making crappy movies not worthy of the substantial movie date bill); and the newspaper industry. Who will TV blame for this one?

The flat disposable income of two-thirds of US consumers makes me worry. The US of A is built on a service economy that is kept spinning by consumer spending - even if that consumer spending is credit card, student loans and other types of debt.

But the woes of TV have more to do with the shift in ad spending by companies from TV to the Internet. Notice that even YouTube has a bunch of ads that look an awful lot like TV ads. Mobile video consumption is rising. All of that will have an effect on the current pay-TV ecosystem. Think about all the telcos that spent millions to get into the TV game around 2004.

One last thought from this article: "In a short time, more people will stream video online each day than will watch scheduled programs on traditional TV, according to a new study from Ericsson, the Swedish communications company."

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