TV IS RESILIENT BUT THERE IS NO TURNING BACK

IPG’s Magna forecast reveal that TV advertising keeps on growing in 2016 and then stabilizes in 2017. In fact, given some issues with Online Video’s scale and viewability, some advertisers have a renewed interest in TV’s ability to reach a mass audience.

If you analyze the above graph and you overlay this graph with Time Spent for each media, it is understandable that PRINT (Newspapers and Magazines) has seen the most deterioration. In fact, it still overindexes vs. time spent on print and digital under-indexes, which is the driver for Print’s continued advertising decline and Digital’s rise.

Well, what about TV?

The graph below is clear:

Since 2012, all age groups except 50-64 have spent less time watching TV. Those ages 18-24 are seeing 30% less TV since 2012!

Another way of seeing this picture is that for Millennials (ages 14-23), only 49% of the time they watched movies or TV shows was on a television set.

Some may say that this not a big deal because in the end Content is King, and the TV companies own this content and they can make it available on other platforms. But ask any newspaper executive and she can tell you that a reader in print is worth many times over a reader in their online edition.

Cisneros has a long tradition in producing TV content and let me tell you that the monetization is very different when that content goes to a Broadcast channel than when it is seen on YouTube. Our content is viewed more than 30 million times on YouTube every month, but our annual revenue is minimal.

Moreover, digital advertising is extremely concentrated in two players: Google and Facebook. There is also another trend occurring which is the shift from web to mobile. In mobile advertising, the dominance of these two players is even stronger.

So TV companies are facing a myriad of challenges, despite the fact the Content is King:

• Cord-cutting:  less subscribers mean less affiliate fees (fees that cable and satellite operators pay TV programmers)
• Streaming Video: Live TV is increasingly around News and Sports – what about the other content?   How will slimmer bundles hurt a programmer such as Viacom or Discovery (mostly general entertainment programming)?
• Audiences move to digital:  with their great content, they can capture these audiences but at what monetization rates?
• Oligopoly:  how can traditional TV content companies compete against Google and Facebook – it’s not just eyeballs, it’s a combination of data, scale, and technology

One thing is clear: there are no boring days for media executives!