Why Cord Cutting May Be A False Flag for The Future of TV

Is the Internet bad for television? Maybe not: Evidence suggests that the web makes people watch more television, and get more engaged with TV advertising.

For years now, the television industry has lived in fear of “cord-cutting,” the name given to the idea that audiences will abandon television for the Internet, especially as more content becomes available for streaming or download, often paired with the fear that this loss of viewers (and advertisers) will lead to the collapse of the medium.

This fear isn’t based on any definitive evidence, as falling ratings for broadcast and cable shows could also be explained by numerous other possibilities, including more competition from a broader array of channels and other media sources besides television, such as videogames. That hasn’t stopped analysts from referencing cord-cutting in articles about a 50 percent decline in ratings over the last decade or how 2012 was the year “when the television ratings really fell apart.”

Earlier this month, respected analyst Craig Moffett declared that “cord-cutting is real” andsuggested that pay television subscriptions would fall more than 5 percent between now and 2020 as audiences learn to go elsewhere for their entertainment. However, the basis of most cord-cutting conversations seems to be rooted in a simple misunderstanding of the content itself: the idea that online video content is in some way inherently different from television as a whole.

Defining television as video content you watch in one specific environment or using one particular method (while online video content is some unknowable “other”) creates a line of demarcation that gets hazy when you consider a show like Arrested Development, which jumped between the two relatively intact. As author Warren Ellis recently wrote, “I think it’s worth admitting, now, that ‘television’ has become one of those legacy words, like ‘phone,’ that we use to point at a thing, without really fully describing it. It certainly doesn’t mean what it used to.”

“We don’t actually believe there is such a thing as digital video. It’s all just TV,” said Jon Heller, co-founder and co-CEO of FreeWheel, which works with companies to monetize content within the new media space. “No one buys kitchen television, in terms of advertising, the same way that they don’t buy living room television or bedroom television. It is all just TV.” The difference, he says, is that the audience now has more choices about when and where they watch, and the television industry needs to figure out how to deal with that diffusion.

One unanticipated side effect of this greater availability, according to the seventh annual Deloitte State of the Media Democracy survey, released earlier this year, is that the availability of more ways to watch content–like laptops, tablets and other mobile devices–may be growing the amount of television watched overall, instead of simply replacing one form with another.

“Our conclusion is, the individuals using tablets and smartphones tend to be much heavier media consumers across the board, and in particular tend to be heavier users of digital applications, such as streaming and downloading, even if they’re not using their tablet to do that,” Deloitte vice chairman and U.S. Media and Entertainment sector leader Gerald Belson told Wired.

recent TiVo survey of almost 10,000 of the service’s subscribers also reached a similar conclusion: There was “no significant difference” in traditional television consumption between those who subscribed to Netflix and those who didn’t. Indeed, those who did subscribe, the survey discovered, may even be more likely to watch more premium cable dramas than those who didn’t.

Continue reading on www.wired.com

Categories: Advertising, Second Screen, Television, Video

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