1. Linear Reminds Us It Is Still Here

While the prevailing narrative seems to be that linear TV is about to go the way of the glossy magazine, a number of inconvenient stats popped up this week to remind us that this is not actually the case.

First off, Yellowstone, the Kevin Costner vehicle that runs on the Paramount Network saw 8 million people tune in to its Season 4 debut. That’s around five times the number who tuned in to the Season 3 debut of HBO Max’s Succession.

Then Disney reported that its Hulu vMVPD added around 300K subscribers last quarter, reversing earlier losses, while sports-oriented vMVPD fuboTV is now at the 1 million subscriber mark, more than tripling its YOY subscriber numbers.

Why It Matters

In 2015 I wrote a book called Over The Top. How The Internet Is (Slowly But Surely) Changing The Television Industry. At the time, I don’t think anyone realized how prescient the word “slowly” would be.

While other mediums were rapidly overrun by the internet blitzkrieg, TV has proven far more resilient.  This has alternately confused, baffled and angered Silicon Valley’s Powers That Be. 

But for the folks manning the trenches it means that they are going to have to deal with a bifurcated ecosystem for years to come.

We’re thinking 10 to 15 years minimum.

That’s not to say that linear pay TV is about to enjoy a renaissance or that cord cutting won’t pick up considerably.

But there’s a floor there, and it’s likely somewhere around 40 percent of the audience. 

If that sounds surprising to you, remember this factoid: DVRs were more or less free (they were built into the set top box) and didn’t really require any change of behavior, and yet they only achieved slightly more than 50 percent penetration in their heyday.

So there’s that.

On a practical level it means that programming and (especially) advertising will have to account for people being on both platforms simultaneously and not in any easily predictable pattern: a White Lotus might cause an uptick in streaming viewing for a few months, elections or a successful NFL team might then swing many of those viewers back to linear. And all sorts of permutations in between.

That means that the industry will need to figure out how to plan, place and measure ads across the two platforms, one of which is far more amenable to targeted audience-based buying than the other. 

So yeah, it’s not getting any easier.

The fear, of course, is that because it’s not getting any easier, advertisers will shift budgets away to things like Google and Facebook that are easier. Not more effective, mind you, just easier.

Or that they’ll just keep their budgets on linear because that’s easier, not to mention familiar which will create the perception that TV is maybe not quite so effective.

What You Need To Do About It

If you are one of the companies involved in measuring, buying or placing TV advertising, you need to figure out a way to join forces so that doing those things are easier for advertisers.

This is critical because as TV has gone from being incredibly easy to buy, plan and measure to being anything but, it’s in danger of losing all the advantages it has over digital display advertising.

It’s easy for ad tech players to dismiss these concerns by claiming “they need to buy TV, they’ll figure it out.” But I wouldn’t count on it.

If you’re a brand, it’s time to start referring to all TV as “TV”. None of this “we consider  streaming to be digital” nonsense because that’s how your ad agency is structured. Sight, sound and motion on a big screen is TV. Tell your agency to get over themselves and follow through on their “we’re integrating TV and digital” promise. 

Because that’s how your audience sees it.

If you’re an analyst or journalist who covers the TV industry, time to reframe your narrative, so to speak.

2. Streaming Reminds Us It’s Still All About The Shows

While linear numbers are looking all rosy, streaming numbers have taken on a more decidedly somber tone.

Disney+, for instance, only added 2.1 million new subscribers in Q3 while ESPN+ added 2 million new subscribers as the fall sports season (football, basketball, hockey and a range of collegiate events) got underway.

Why It Matters

This should not be surprising.

After an initial period of “let’s try this one!” exuberance that was goosed by the pandemic, viewers seem to be paring back on the total number of services they will subscribe to.

Part of that is just finances, part of that is realizing that there are only so many hours in the day and that they don’t have time to watch everything. And much of it is that they’re looking at what’s on those services and not finding any real reason to spend another five or ten dollars a month.

Which is why a recent Hub Research survey found that 4 in 10 consumers sign up to a steaming service to watch a specific show.

With Disney, it’s safe to assume that families with kids rushed to subscribe during the first few quarters as did fans of various superhero franchises.

But then what? If you don’t have kids and you don’t like superheroes, there’s not a whole lot of compelling reasons to sign up for Disney+. (Check out David Bloom’s full-blown analysis of what’s going on with Disney here at TVREV.)

To be clear, it’s not like any of the Flixes are in trouble and one big buzzy hit will certainly jump start subscriptions again. But that’s much easier said than done and there’s still going to be a whole lot of churn as viewers try to keep their streaming budgets under control, especially given all the news about inflation.

And that’s before you get into the expiration of all those free six months subscriptions the mobile carriers had on offer.

What You Need To Do About It

If you’re an SVOD service, realize that subscriber numbers are going to be tricky over the next few years as consumers do a lot of sampling and churning and figuring out what they want.

Marketing is going to play a really big role here, creating an image for the brand, promoting more than just the top hits and working to understand who your core audience is and where opportunity it.

You can help them out by creating a consistent product, series that consumers can quickly look at and understand why and how they fit in with your network’s body of work. Because that’s what’s going to get them to subscribe and keep on subscribing. 

(It really is all about the content.)