For at least a decade, industry pundits have far and wide hailed the death of TV… but it hasn’t exactly happened. So… Is TV really dead or not? In this short piece, we will try to settle the debate once and for all, discussing the current state of linear TV and its possible evolution into a more relevant medium. Spoiler alert: things are more complicated than they seem. 

 

To start with, the bombastic “is TV dead” question is definitely headline-worthy, but a little vague. It could mean a couple of things. For example: Is TV dead because linear TV technology is giving way to VOD? Is TV dead because it offers no content people like today? Is it dead because people gradually abandon linear media? Or is it dead because our TV watching experience is no longer a collective, social thing we cherished for decades past? 

Or perhaps people today need more flexibility to fit watching TV around their busy lifestyles – and linearity is no longer an option?

Things are not so black and white. Technology-wise, for example, VOD is still far from perfect. It can be prone to inconsistent picture quality, video buffering and other typical technical annoyances which never really happen on cable TV. This clearly shows that OTT has a long way to go before it reaches the technological maturity of linear TV – a medium that just works when you press the button. 

OTT media may never attain the quality of cable – streaming services hinge too much on the end user’s bandwidth and other factors (servers and content delivery networks) that are clearly beyond the control of the broadcaster.

TV may be a thing of the past, but TV brands are here to stay

Much has been said about linear television being in decline, but cable executives are far from throwing in the towel. Brands originally involved in linear TV still have a lot to offer and will remain relevant for decades to come as content production companies – if they decide to embrace the technological shift. 

Examples of brands which have successfully re-established themselves in the new reality include FX (currently launching its content on Hulu and rebranding to FX on Hulu), National Geographic (now launching as part of the Disney Plus offering) and Turner (now available as part of HBO Max subscriptions). These are all originally linear brands which understood they needed to adapt to the new market conditions and evolving customer needs. These examples prove traditional linear media companies seek opportunities in becoming a part of the digital landscape, and don’t necessarily see it as its bane.

 

Advertising on linear TV – expensive but still relevant

If linear TV ever dies for real, it will take TV advertising with it. Linear TV ads are usually extremely costly and can’t be precisely targeted. Considering poor addressability and attribution of linear TV ads, advertisers prefer to spend the money on OTT services.

But not all is lost for linear TV. Live broadcasts of large sporting events will still be a crucial element for traditional TV, also driving advertising around live slots. Shows like presidential debates or other large scale news events require production skills that only the people working in a regular broadcaster operation still possess.

Advertising on digital channels – cheaper and more effective but not all roses

Advertising on digital channels is also facing difficult times with changes to the digital ecosystem like the killing of third-party cookies. With privacy policies and regulations making it a priority to give users an option to refuse cookies from being saved on their machines, tracking and ad targeting is also increasingly challenged. 

As a result, networks are now pushing hard into first party data, asking viewers to sign in to see content. The very same owners of the linear content need to build a large number of streaming products to capture back the lost revenue. In other words, a shift from linear to digital.

 

Some content types are simply built for linear TV

For many people today, traditional television remains the go-to source for news, live content and sports. There are many types of content (like sports) that will likely always be served in a linear fashion. And there is a solid psychological premise behind it: people love the feeling that something is happening “as they’re watching it”. This explains the popularity of certain TV shows like the talent shows The Voice and X Factor, and justifies the unique thrill of grabbing a beer and watching the football championships as they unfold.

Although it’s diminishing, there’s still a lot of value in live content, and linear TV offers the most consistent, uninterrupted delivery of the content to the majority of the global market. For this reason, linear television remains at the core of service offerings for operators. This core offering is not replaced by often supplemented by subscription-based VOD services.

Even if you cut the cord, you’re still on cable (kinda) 

Again, things are complicated and it is too early to announce the death of TV – it’s more of an evolution. Today’s leading cable networks like FX and HBO are still growing strong and hold their ground. But that’s mostly because they have already evolved from being just networks to the de facto content creators. The death of TV may thus be just about the manner of delivery rather than about the disappearance of certain brands.

Big content production companies still have interesting content rights, skills and money. The fact that people don’t think in terms of TV channels anymore doesn’t mean these brands are gone: think Nickelodeon, Disney Channel and Cartoon Network. Viewers are still watching those networks’ shows on streaming platforms – and the franchises are going from strength to strength. 

 

Why do we say that TV is dead?

It seems clear that linear TV is here to stay for quite a while, but it is losing its grip on being the dominant service. Streaming is taking over, day by day. Linear TV is certainly not the only option for viewers and advertiser.

It’s safe to say VOD will eventually overcome scheduled TV, but the process might take a little longer than we think and is much more complex. Overall, the decline of linear TV will be prompted by a couple of factors: 

 

People want flexibility

Juggling more and more everyday life responsibilities, people need a way to fit their watching habits around their tight schedules, and watch their favorite TV shows whenever they please. The rigid network schedule could be the main deterrent from linear TV. The internet just offers more flexibility.

 

Advertisers

Trying to optimize their costs, advertisers are increasingly focused by data and addressability and need attribution models. Streaming content, unlike broadcast and cable TV, offers just that: audience data which is relatively easy to quantify and analyze. Streaming content providers offer advertisers exact numbers on audience sizes and detailed viewer demographics.

In other words, streaming makes it easier to know what person is watching the content.

 

People want choice

TV subscribers are usually made to pay for the content they’ll never watch. For example, if you only want news channels, you still need to pay for a bunch of sports channels – and vice versa. 

Big channel bundles have long been marketed to subscribers as a huge advantage. But streaming sites like Netflix and Amazon have flipped the script. There are no channels to bundle –  just a monthly subscription fee in exchange for the right to browse, search, and stream thousands of titles. 

 

Streaming services are made for binging

There wouldn’t be binge watching without streaming. It explains the insane popularity of serial dramas, and builds new opportunities for media companies. Much of the TV content we know and like just works better on streaming TV platforms. Going back to the good ol’ days when people waited a week for another episode feels painfully retrograde.

Most series produced today have abandoned the procedural drama formula (Dr House, CSI) in favor of series where a de facto 10-hour movie is broken up into a bunch of hour-long segments. This approach encourages binging, and has thus become an integral part of our culture. There’s hardly any way to go back from here.

 

The TV set is no longer the household’s entertainment hub

Millennial viewers are embracing streaming video platforms like no other demographic but the experience is hardly connected with the living room right now. A Nielsen report says since 2011 people aged 12-24 have consistently spent less and less time in front of the actual TV in the living room. And since these demographics are very precious for advertisers, Hollywood will need to follow suit and deliver its content where viewers want to receive it.

 

Content owners call the shots

TV’s convergence with the internet is just a matter of evolution. There will be no revolution with underdogs suddenly gaining control of all broadcast content everywhere. Quite the contrary: TV content owners – including networks like NBC and HBO, big studios like Sony TriStar, and cable network conglomerates like Viacom – still hold the cards today, and it isn’t likely to change even if Internet TV becomes the new normal. They own the content we watch (e.g. TV shows) – and everything else is just a matter of distribution.

 

It’s a natural evolution

Naturally, content owners are terrified by the advent of any new technology challenging how things have been done for a long time. But we must remember that VHS cassettes did not really kill movie theaters, and the iPod did not kill music. And while it is true that content owners will continue to hold precious the tried and tested ways to distribute TV content – it will be only for as long as it’s financially viable to do so (and as long as advertisers have money to spend). 

 

The business may be different for cable and satellite companies, but it’s still good

Consumers think of McDonald’s as a restaurant chain, but in the business world, McDonald’s is considered a real estate company. Franchisees pay to use McDonald’s brand name, its proprietary processes and trademarked menu items, but unlike other franchises, McDonald’s owns the land the stores are built on. Realizing the changing tide was, in a nutshell, what made McDonald’s such a successful business it is today.

A parallel can be drawn here with cable and satellite companies. If these companies are forced (by streaming platforms like Netflix) out of the business of buying and distributing content, they’ll naturally fall back on the business of operating broadband networks which carry video streams into tablets, laptops, and living-room TVs –  charging both senders (Netflix et al.) and receivers (consumers). Bottom line: they will be fine. 

And it’s not the worst thing to happen to these companies. While competition between streaming giants will become fierce as they fight for eyeballs, it’s good to be a cable operator and –- whatever happens – enjoy a steady cash flow for years to come. 

 

COVID muddles the picture

The COVID-19 pandemic has seriously skewed the viewability statistics, making it even more difficult to answer if TV is dead (or just fine). Between the years 2019 and 2020, according to a report by a UK regulatory and competition authority Ofcom, there was a 32% increase in the time people spent daily watching content. The majority of the increase, 37 minutes, was through platforms such Netflix, Amazon Prime and Disney+. However, in the same time period, linear TV also increased by a comparable 31 minutes. This can be attributed to many people still defaulting to linear TV for their news consumption habits, or seeking current information about the pandemic.

Is TV dead or not?

With the right content, skills and money, there are several good reasons why it is still premature to announce the death of TV. Although well past its heyday, linear TV is here to stay for now – it’s just losing its grip as the dominant service. Linear TV is certainly not the only option that you have anymore – neither as a viewer nor as an advertiser.