For the past few years, we’ve heard the same prediction that this is the year that cord cutting really takes off. Here’s the thing, though: people wouldn’t keep making that same prediction if it had already come true. So far, subscribers have been more reluctant to abandon pay TV providers than many experts assumed.
Data from Leichtman Research shows that the number of pay TV subscribers did decline last year. As an industry, cable and satellite TV providers lost 125,000 subscribers in 2014—but there are still more than 95 million pay TV customers in this country. So although losing subscribers surely got the industry’s notice, it’s not very likely to have them in panic mode.
As pay TV loses subscribers, streaming is gaining them. In its “The Total Audience Report” for Q4 2014, audience tracker Nielsen shows that streaming video services are increasingly popularity. More than 40 percent of homes now have online subscription video on demand (SVOD) service from a company like Hulu, Amazon Prime, or Netflix. So why aren’t these two combined data sets a bigger worry for the pay TV industry?
People Don’t Always Follow Through
According to Clearvoice Research’s 2014 “TV Everywhere Market Profile,” 13 percent of those surveyed indicated they were likely to discontinue cable service. Of that group, 74 percent thought they’d do so within one year. Perhaps surprisingly, Baby Boomers indicated they were more likely to cut the cable than were MIllenials or Gen-Xers. Half a year after publishing the survey, though, Clearvoice says that only 22 percent of subscribers who said they’d probably cut cable have actually done so. So what’s stopping them?
One possible hurdle is that the economics of cord cutting hasn’t necessarily played out as its fans had hoped. As we’ve previously reported, PlayStation’s Vue streaming service provides an alternative to cable or satellite, but not necessarily a cheaper one. Some streaming services still lack major channels and sports subscriptions that people want. Another possibility is that as more cable companies offer Internet service in addition to TV, the convenience or pricing of bundling the two services wins out over cutting the cord.
Time Spent With Each Technology
Additional information from Nielsen shows that regardless of the total number of subscribers, users spend far more time watching live TV than streaming video. In the final quarter of 2014, users watched an average of 149 hours and 14 minutes of live TV per month; in the same period, they spent only 10 hours and 29 minutes watching video online. Although year-over-year (YoY) data from 2013 shows that TV viewing time is down and streaming video time is up, TV still enjoys a greater than 14:1 advantage in total viewing time.
Over time, though, that advantage could disappear. After breaking the above data up by users’ age, we can see that viewers over 65 years old have the highest TV:streaming time ratio, over 44:1. Young adults aged 18-24 have the lowest such ratio at just under 6:1. In other words, cord cutting might not be something that pay TV providers have to worry about much today, but if these current trends by younger viewers continue, cord cutting will become a serious problem for pay TV revenue.
Change is Coming, But You’ll Have to Wait
There’s no doubt that the Internet changed the way people listen to music. Given time, it will also change the way people watch video programming—it no longer feels appropriate to call these programs “TV.” However, it’s also possible that just as radio found a way to coexist with TV, TV will find a way to coexist with streaming video. One doesn’t necessarily have to die to make room for the other.
How long will this fundamental change take? We don’t know, but here’s a bold prediction: it won’t happen this year. Of course, you may hear that same prediction next year as well. But it will happen eventually, and when it does, you’ll want to be ready for it. Make sure your Internet connection is fast enough for current and future streaming technologies now and you’ll find yourself ahead of the curve, rather than behind it.
Photo Credit: Guilherme Caldas/Flikr According to the USC Annenberg Center for the Digital Future, its 12-year-old Digital Future Project is the longest ongoing study of digital technology and its impact on American society. In December, the group released the project’s 2014 report, with findings on 180 issues related to digital technology. With such a wide focus, the report offers plenty of topics for discussion, but one that stands out most is the Internet’s impact on politics, and what that could mean for the future.
A Technological Tipping Point?
In 1960, television came into its own regarding its importance to politics and overtook radio in terms of influence. Many have long noted that those who heard the Nixon-Kennedy presidential debate on radio believed Nixon won, but those who viewed it on television believed Kennedy was the winner. Of course, Kennedy won that election, and some believe television was the key reason.
We mention that transformative moment because Jeffrey Cole, Director of the Center for the Digital Future, believes we could soon experience another one.
“We may be entering a realm where the Internet plays a larger role in political campaigns than television does,” Cold said. “Digital technology is assuming a critical role in politics — both in getting out the vote and for informing voters — particularly for voters under 35.”
Or perhaps we’ve already had that moment. Rebecca Donatelli, who served as the chief Internet advisor to John McCain’s 2008 presidential campaign, said “President Obama actually won utilizing what we do for a living.” That’s a pretty bold statement, and one that would be difficult to prove. But what do voters actually think of the Internet’s effect on politics?
People Are Talking
Of those Internet users surveyed for the report, 71 percent think the Internet is important for political campaigns; that number is up 14 percent since 2000, showing a definite trend. In another finding, 58 percent believe the Internet helps people better understand politics. Perhaps because it’s human nature to complain, 72 percent believe we should be free to criticize the government while online, and a slight majority of 53 percent believe it’s okay to express even extreme political views online. Another 52 percent feel comfortable sharing political views online, yet only 30 percent believe it’s safe to speak freely about politics online.
But Is Anyone Listening?
Only 32 percent believe the Internet will cause politicians to care more about what people think, and another 32 percent believe the Internet will give people more say in what the government does. Just 34 percent believe it gives the average person more political power. These numbers are all up slightly from previous years, but probably not enough to say they’re trending yet.
Of course, what we don’t have is a list of these same questions asked about television and other media, so it’s difficult to compare them at this point. Nor do we know what people would have said about television’s power in politics the night before that presidential debate in 1960. What seems safe to say, though, is politicians will put their message anywhere a significant audience exists. As the Internet continues to grow and evolve, it’s reasonable to think its influence will continue to increase, just as television’s influence did. So if we’re going to look at when the Internet will genuinely surpass television for political influence, we also need to know how much time people spend with their TVs.
Time Spent Online vs. Television
Internet users reported spending an average of 14.1 hours per week online when not working, and another 6.9 hours per week online at work. A 2014 study from the governmental Bureau of Labor Statistics claims Americans 15 and older spend an average of 2.8 hours per day watching television, or 19.6 hours per week. Nielsen data claims the numbers for television viewership are much higher, but because that info helps set TV ad rates, it may not be entirely unbiased.
So, we’re still spending more time watching TV than going online for fun, but the trends look a lot better for the Internet: in 2000, users only spent an average of 3.3 hours online per week. So if we can measure influence in terms of time—and it’s not certain we can—TV still has the Internet beat, but there’s a very good chance that won’t always be the case.
You Tell Us
So now it’s our turn for a survey — which has more influence over your political leanings, the Internet or television? Is the Internet a true game changer, a driving force in the political future? Or does it just make us feel better to speak your piece, even if no one is listening?
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Photo: Kevin Dooley/Flickr If someone tweets about a TV show, does anyone see it?
That’s what Nielsen, the company well known for producing television ratings, is attempting to figure out.
Previously, Nielsen was only able to keep track of how many tweets were made about a television program. Now, however, Nielsen is attempting to track how many people actually see those tweets.
Nielsen has discovered that for an average program on TV, the amount of people following the show on Twitter is 50 times larger than those who tweet about it. Therefore, if 100 people tweet about a show, 5,000 people are seeing those tweets.
This development is a breakthrough for marketers who have been trying to find the best ways to advertise on Twitter. They were always able see how many people were tweeting about a TV show, but how many people were actually interacting with those tweets remained unknown.
Now, by finding out there are so many people engaging with TV on twitter, there is more motivation to start advertising on twitter. Advertisers now have more information, and can target their audience more effectively with the new Nielsen system.
Internet users hate advertisements. In fact, 68% of those surveyed by the Pew Internet & American Life Project said they are “not okay” with targeted advertising. Some say they are distracting, others hate that ads often play on their own, and some are just find them irrelevant.
Unfortunately, the new Nielsen system will be bringing more advertisements to Twitter, whether we like it or not. With Twitter’s Initial Public Offering on the way, the company needs as many revenue streams as possible to keep investors happy. Television ads are a great way to do it.
Regardless of consumer sentiment, this is a great development for Twitter. Nielsen has discovered thousands of people check Twitter to see what’s on TV and often find out about movies playing on TV simply because they checked Twitter. They will even sift through the tweets to see what channel it’s on.
Now that marketers have these numbers, they will be wasting no time placing advertisements in the middle of all the tweets. If they find that 1,000 people have tweeted about a TV show, they now know 50,000 have seen these tweets.
Don’t believe this makes a difference? On October 9th, Comcast came to an agreement with Twitter, to advertise their “See It” feature, which will allow users to click on their tweets and immediately begin watching the show the ad displays. So if the show “The Voice” is trending on Twitter, Comcast can send out an ad that will fit right in with all of the other tweets, and encourage people to watch it.
Coincidence? I think not.
Not only is this great for advertisements, but this Nielsen system is great for Twitter too. Now, when companies approach them to advertise on Twitter in the TV arena, Twitter has a significant audience rating to justify ad prices.
Bottom line, more ads will be appearing on Twitter. It just makes too much sense for all parties involved.
Well, besides those of us who don’t like Internet ads.
Photo by David Berkowitz