What's going on?
It wasn’t long ago that the consensus opinion seemed to be that on-demand streaming services such as Netflix were going to decimate traditional television networks. But a swathe of reports from big media companies this week suggest the story isn’t that simple…
What does this mean?
On Tuesday, CBS – the most watched TV network in the US – said its advertising revenue grew 31% in the first quarter (vs. the same quarter last year). It was helped by hosting the Super Bowl (you can re-live the halftime show here), but even without football its ad revenue jumped 12%.
On Wednesday, Time Warner reported that it made more profit than expected. Much of the credit goes to a big increase in revenue from its cable channels, like TNT, which are exactly the sort of channels that are supposed to be threatened by streaming services. 20th Century Fox also reported higher than expected revenue growth – and credited cable TV and ad revenue as well.
Why should I care?
The bigger picture: “There is a shift in dollars coming back to network television.” So said the CEO of CBS. Part of the reason is that there will be a lot of political ads this year (a Presidential election is coming up, in case you weren’t aware…). But there also appears to be a shift back to television by the advertisers as, apparently, “digital” options aren’t proving as effective as hoped. That’s an interesting shift in sentiment… it will also be interesting to see how long it lasts.
For you personally: There’s a content war going on – and the viewer is the winner. Every media company is investing in content, i.e. trying to make great shows. Sometimes it’s to draw viewers into subscription services (like Netflix and Amazon Prime). Other times it’s because content itself is proving valuable, i.e. CBS can sell its content through various platforms (like Hulu and others.). Arguably, this huge investment in content probably can’t be sustained in the long term – so enjoy the plethora of great content while it lasts!