As the final figures get tallied, it looks like 2013 will go down as the first year since the creation of the earliest cable systems, in the 1940s, when the total multichannel-TV business will actually lose subscribers.
This news will no doubt prompt many of the usual articles about the end of cable TV, and of television in general. But a close look at the data in this year’s annual Viewer Watch special report on the changing use of video shows little hard evidence to support such views:
• Total television viewing is now at record levels, up more than 15 hours per month since 2008, when over-the-top video providers like Netflix began gaining popularity.
• Pay TV subs will be down, but probably by only 0.1% — at that rate, it would take 250 years for the industry to lose a quarter of its customers.
• Some analysts predict subscriber losses will continue, but will be small, and overall subscriber counts in 2017 are likely to be higher than they were in 2008.
• Evidence for significant cord-cutting is so slight that some researchers, like MagnaGlobal, reduced their projections in 2013 — a first.
• Despite the rapid growth in online and digital advertising, the TV ad spend continues to grow and now accounts for about 40% of all advertising revenue, up from about 30% in 2000, when Internet advertising started to explode, according to MagnaGlobal.
This data doesn’t mean, of course, that the industry can afford to be complacent, as this year’s report shows. “TV Everywhere” is still far from everywhere, with limited content outside the home and relatively low awareness among consumers, and many of the fastest-growing video-consumption platforms— tablets, smartphones and social media — are poorly measured and produce little ad revenue at present.
MagnaGlobal reported that the online video advertising spend was just $3.2 billion in 2013, and the total mobile spend was only $6.9 billion, even though more than three-quarters of all Americans have a smartphone.
Interviews with executives at major operators and programmers indicate that the industry is pushing forward in 2o14 with a number of major initiatives to improve the way it delivers and monetizes video on multiple platforms. New measurement systems will hit the market this year to help track viewing on tablets and smartphones, and operators are pushing ahead with major improvements to TV Everywhere.
To help executives address these issues, Viewer Watch 2014 shows the impact of changing trends in video consumption. Data includes projections for TV advertising, multichannel advertising, multichannel subscribership, and consumer usage and ownership of a variety of devices, such as TVs, tablets, mobile phones, game consoles and streaming media devices.
We hope this provides a reference to basic data that can be revisited again and again throughout the year.
Like previous versions of the annual report, this year’s Viewer Watch was made possible with the help of a number of researchers. Among the organizations that were particularly helpful in providing data, we’d like to thank Horowitz Associates, PricewaterhouseCoopers, Magna Global, Nielsen and Fox Cable Networks, which compiled some Nielsen ratings data for this report.
Contributing writer George Winslow compiled the data, conducted the interviews and wrote the articles.