Photo: The Dirt Floor
It could take as little as five years for television as we know it — broadcast and cable — to enter its final death throes, according to census statistics and a recent report from analysts at Credit Suisse. The culprit: young people and new households who just aren’t interested in signing up for paid cable and satellite TV service.
Credit Suisse analyst Stefan Anninger wrote in a recent report on TV media that 200,000 fewer subscribers will pay for TV services in 2012, and that of 1.8 million new households formed last year only 16.9% of them signed up for pay-TV services. Previously, Anninger had forecast a rise in the number of TV subscribers buoyed by the slowly growing economy.
Traditional TV penetration in the U.S. is still high, at 83.2 per cent (down from 84.1 last year). But the fact that Anninger sees a secular decline in TV in the future, unlinked from cyclical recessionary belt-tightening, forces a question for advertisers and other Big Media folk: How long can TV last in the face of iPads, internet TV, web video and other wireless video sources?
One answer is to look at the history of the phone. And by “phone” I mean the hard-wired telephone that used to be plugged into the wall of nearly 100 per cent of American households just a few years ago. In 2004, everyone had a plain old telephone and no one measured the percentage of households that survived with only mobile phone service. That changed in 2005, according to the U.S. Census and CTIA, a wireless industry body:
- Percentage of U.S. households with wireless-only phone service:
- 2004: Unmeasured
- 2005: 7.3%
- 2006: 10.5%
- 2007: 13.6%
- 2008: 17.5%
- 2009: 22.7%
- 2010: NA
- 2011: 29.7%
The collapse of the telephone took just five years.
Nearly one in three houses now has no telephone. In houses that retain phones, they’re often used only as the number you give businesses you suspect will generated unwanted telemarketing calls; or they’re there by default as part of a cheaper wireless bundle.
The TV business has been aware of the “cord-cutters” — people abandoning TV in favour of Hulu, Netflix and YouTube — for some time. The scary new demographic, according to Anninger, is the “cord-nevers“: young people and students who have never paid for TV and don’t see a reason to start now:
“They are growing up in an Internet-based video culture in which the mantras of ‘why would I pay for TV?,’ ‘pay TV is a rip-off’ and, ‘I can find that for free on the web’ are getting louder. We fear that some of these consumers will find pay TV far less relevant to their lives than do today’s adults.”
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