TV won’t be giving up its reign on viewers any time soon.
When Netflix adds close to a million new subscribers to its platform in the same quarter that nearly a million households cut their cable, it’s easy to assume that television has seen its last days. But digging deeper into this generation’s consumption habits, the confusion of multiple platforms, and the myth of a better experience for consumers, you’ll see that streaming services haven’t quite figured out how to take down TV.
I don’t know about you, but I’ve been guilty of losing hours watching YouTube videos, most of them too ridiculous to even mention. I’ve spent even more evenings binging on Netflix catching up on old series or getting introduced to new ones. That’s normal behaviour for a viewer in 2018. TV just isn’t cool anymore, right?
But wait. Not so fast. Research shows that while Americans spend about 2 hours each day on their social (including 40 minutes on Youtube) and 25 minutes watching video on their “phones, tablets, and computers,” that’s still peanuts compared to the over 7 hours they spend watching TV. It’s also only an hour less of the peak year of TV watching which viewers were spending over 8.5 hours each day in front of a television set. I’d say that’s one pretty clear indication TV still reigns supreme.
Finding Your Faves
If you’re one of the millions of consumers who have cancelled your cable packages in exchange for multiple streaming services, chances are you’ve had a mixed experience. You’re goal was likely to save some dollars while still catching all your favourite shows, but that thought hasn’t exactly delivered on its promise.
Fact is, no single streaming platform carries all the content you’d be able to consume over regular TV. It takes the majority of consumers a combination of multiple streaming platforms to get the amount of content comparable to their cable packages. So looking at the charts below, getting access to the libraries of Netflix, Hulu, and HBO would cost you about $40 total. For a platform like Hulu, that doesn’t include streaming live TV which would run you $40 on its own.
I bring this up because if you still like reminiscing on episodes of Friends but can’t get enough of Power, then it’s going to take you combining several of these platforms together to get the broad options of shows and movies you enjoy. And not only can that be costly, searching through these platforms to find exactly what you’re looking for isn’t the best experience.
TV Business Is an Advertising Business
Here’s something all of these streaming services competing against TV already know: The TV business is the advertising business. Over $70 billion is spent each year on TV ads. That means penetrating TV isn’t all about speaking to you the viewer, it’s also about convincing advertisers. And for a platform like Netflix, their model doesn’t even support that possibility.
Netflix, in turn, is spending and losing billions a year trying to monopolize consumers’ viewing habits. In short, they want to be the new TV. That’s a risky bet, and an expensive one. They’re projected to be in the red at about $3.8 billion by the end of 2018. Netflix is also in debt over $9 billion and has obligations to produce content in the ballpark of $18 billion.
These numbers sound insane to any normal person, and even to some sophisticated business minds, but this is the cost of competing with the mecca that is television. It costs and costs big, which is another reason TV is expected to stick around much longer than you may expect. Very few companies are willing to attempt the Netflix model at the pace needed to compete.
But what about platforms like FB and Amazon, you say? FB, in particular, doesn’t charge at all for its content. They’re built on advertising in a semi-similar way to television. But it’s yet to be seen if FB can create the type of content that can rival that of even Netflix, much less traditional TV. And are consumers ready to make Facebook their go-to choice for viewing content?