Television Still Hugely Profitable, Also Dying
Like all readers of this magazine/web site, you're an up-to-the-minute, techno-savvy news imbiber, surfing the info waves like a Kelly Slater of the media, uploading data to the C-drive of your mind through your panoply of mobile devices, not letting your on-the-go lifestyle inhibit your endless search for knowledge. Or maybe you watch a lot of TV, just like people did in the 1950's. Or maybe both!
Either way, this may be of interest. A new report from Nielsen (via AdWeek) shows just how big TV still is. And though digital video is gaining fast, it still brings in only a tiny amount of money. Behold:
I think that a substantial part of this gap comes from the fact that online, advertisers know exactly what they're getting. They know precisely how many people saw their ad, and if there was a click-through option, exactly how many people clicked through. On TV, on the other hand, they have almost no idea. During commercials, people go to the bathroom, they check their email, and most importantly, they just skip the commercials with their DVRs. I never watch anything live, precisely so I can skip over the commercials. Yet advertisers keep paying for me.
It's a more complicated story than just that, of course, but the fact remains that, as I mention in this essay in our latest print magazine (just online today), TV advertisers are still using incredibly blunt demographic information (like "adults 18-49") to measure who's watching and whom they're aiming at. As a consequence, they throw billions of dollars at television, without only the barest sense of whether it's worth the price (although in fairness, this is something of a perennial in advertising; the 19th-century department store magnate John Wannamaker supposedly said that half the money he spent on advertising was wasted, he just didn't know which half). The TV industry still brings in huge amounts of money, but they have no idea what the future looks like. Though I'm sure that if Wolf Blitzer keeps reading random people's tweets on the air, that'll solve their problems.
And since we're talking about TV, I thought I'd take the opportunity to show you what I think is a pretty remarkable graph that I made when I was writing that essay. The graph didn't actually end up in the piece, so here it is:
Thirty-five years ago, almost half of all households were tuned to one of the three network news broadcasts every night; today it's less than one in six. What that shows is that the decline of network news isn't the fault of the Internet; more than anything else, it's the fault of cable. Once people had other options of things to watch, there was less of a need for them to have Walter Cronkite tell them the way it was. The Internet is only helping that decline to continue.
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