Media Revolution's Cold Hard Facts for the TV Industry

TV Is Dying, And Here Are The Stats That Prove It

JIM EDWARDS NOV. 24, 2013, 10:11 AM Business Insider

The TV business is having its worst year ever.

Audience ratings have collapsed: Aside from a brief respite during the Olympics, there has been only negative ratings growth on broadcast and cable TV since September 2011, according to Citi Research.

Media stock analysts Craig Moffett and Michael Nathanson recently noted, "The pay-TV industry has reported its worst 12-month stretch ever." All the major TV providers lost a collective 113,000 subscribers in Q3 2013. That doesn't sound like a huge deal — but it includes internet subscribers, too.

Broadband internet was supposed to benefit from the end of cable TV, but it hasn't.

In all, about 5 million people ended their cable and broadband subs between the beginning of 2010 and the end of this year.

People are unplugging.

Time Warner Cable, for instance, lost 306,000 TV subscribers in Q3, and 24,000 broadband web subscribers, too.

And Tom Rutledge, CEO of Charter Communications, told Wall Street analysts he was "surprised" that 1.3 million of his 5.5 million customers don't want TV — just broadband internet. "Our broadband-only growth has been greater than I thought it would be," he said.

The following charts show the evidence that cable TV is dying, and that people are also unplugging from broadband internet service.

Cable TV ratings are sinking. Cable TV ratings are in an historic slump. Note that the "growth" line, as charted by Citi analysts Jason B. Bazinet and Joshua P. Carlson, is persistently below zero.

Business Insider Intelligence

Fewer people are watching TV.

This is the macro problem: Ratings are falling across the board. They have been for years.

It's not too surprising that broadcast TV ratings are down. The major networks have faced increasing competition for years from niche-interest cable channels and the better-quality programming on places like AMC and HBO.

But ratings for both cable and the broadcast networks are down.

Even ratings for some major TV events are in decline.

People just don't watch the World Series like they used to. Recently, viewer decline is led by young people, according to Business Insider's Sports Page:

It's the same with basketball.

Maybe people prefer the NBA to the MLB? Turns out that today's big stars don't grab TV eyeballs the way they used to either.

Data via SportsMediaWatch.com and Zap2It.com

For the first time ever, the number of cable TV subscribers at major providers is about to dip below 40 million.

ISI Group / Business Insider

So why are ratings in decline?

We're at the beginning of a major historical shift from watching TV to watching video — including TV shows and movies — on the internet or on mobile devices.

This is going to hurt cable TV providers.

Nearly 5 million cable TV subscribers have gone elsewhere in the last five years. The number of subscribers remaining could sink below 40 million later this year, according to this data from ISI Group, an equity research firm (at right).

Cable and broadband companies are increasingly unable to retain customers.

This chart (below) is the most important chart in this set: It shows the number of net subscriber additions across all types of customers — cable TV, broadband internet and landline phone.

The cable and broadband subscriber business is seasonal. The net number of people leaving or adding services changes with the seasons, because people like to move house in the fall.

It used to be that up to 500,000 new subscriptions would be added across all companies in any given quarter. But now, cable and internet companies are lucky if they get any new subscribers at all. Increasingly, the industry loses subscribers rather than gaining them, according to this data from One Touch Intelligence:

One Touch Intelligence

For the first time ever, less than half of subscribers at the major broadband companies now subscribe to cable TV.

What's happening is that people are giving up on cable TV as a standalone product, and the market is shifting in favor of telco companies like AT&T and Verizon who offer TV as a package with high-speed internet access, according to media equity analysts at ISI Group. (Direct Broadcast Satellite appears to be remaining steady, in part because its customers often live in more rural areas and have fewer alternatives.)

Here is how individual TV providers are affected.

It's not an across-the-board collapse. But this is what you would expect to see during a technological sea-change: The weaker players are crumbling. The stronger players are picking up some of the pieces ... but how long can they also resist the tide?

Fewer households actually have TV.

One macro-economic factor behind the decline is that fewer houses actually have TV.

These charts, from Citi Research, show that the total "Nielsen TV Universe" — the number of people who watch TV — is declining. Note that the number of U.S. households is still growing, but growth in the number of households with cable TV is declining.

Fewer households have TV because they are watching video on mobile devices instead.

Here's the big picture: People are spending more of their time on mobile, and less of their time on TV:

Business Insider

Mobile video is booming.

Even though iPhone and Android phones still struggle to show video seamlessly, the amount of video seen on mobile devices is going through the roof. About 40% of all YouTube traffic comes from mobile.

Business Insider

Tablets are stealing prime time, the period we used to devote to TV.

In the media industry, iPads and other tablets are sometimes called "vampire" media — they come out at night.

Business Insider

Slowly, the money is following the eyeballs. It is shifting from TV to digital media of all kinds.

This research from Macquarie Capital shows a giant mismatch between where people spend their time and where advertising money is spent. People spend more time with digital media than TV now. Ad dollars are likely to follow that shift in the long run, Macquarie says.

Macquarie Capital

Ad revenue increases are masking the macro decline of TV.

The collapse of TV is having a counter-intuitive effect on TV ad sales: prices are going up, even though the number of commercials is going down.

The reason? It's still really, really difficult to gather a large, mass audience in any kind of media, mobile or otherwise. The Super Bowl — on TV — is the only media property than can reach more than 100 million people in a three-hour stretch. That scarcity of large audiences makes TV's dwindling-but-still-big audience increasingly valuable.

Morgan Stanley

The TV business may actually be addicted to the very thing that is killing it.

Even though cable TV has had its worst year ever, cable TV revenues are still rising because companies are charging the dwindling number of customers more in subscription fees. According to analysts Craig Moffett and Michael Nathanson, those higher prices are "part of the problem" that pushes out poor subscribers — losing the TV business even more eyeballs:

"Of course, the fact that pay-TV revenue is still rising smartly is part of the problem ... We have always argued that cord-cutting is an economic phenomenon, not a technological one. ... Pay-TV revenue growth reflects rapid pay-TV pricing growth and that is precisely the problem. Rapidly rising prices are squeezing lower-income consumers out of the ecosystem."

The market does not care that the TV audience is declining.

This chart (below) shows a basket of cable TV stocks over the last year. Not bad!

Google Finance

Time Warner Cable CEO Glenn Britt said in his last-ever conference call that the cable business has been 'in denial.'

Britt, who is retiring because he has been diagnosed with cancer,told analysts on his Q3 2013 earnings call that he thought the cable business had spent too many years complacently dismissing the competition:

Regarding competition, well, duh, we have competition. I say that because when I first got this job 12 years ago, I think the cable industry as a whole, including our company, was in denial that we had real, viable competition. And I still hear some of my peers saying dismissive things about our competitors. And certainly, each of them has strengths and weaknesses, just as we do. However, they are around to stay, and we need to keep getting better at competing.

People who are unplugging from both cable TV and broadband internet are likely going to free wifi.

So if fewer people are watching cable TV and fewer people are paying for Internet service, does that mean that we just don't care about watching our favorite shows anymore?

Not necessarily.

Free wifi — at work, in coffee shops, and on campuses — is making it easier for consumers to get the shows, movies and videos they want without subscribing to any kind of cable or broadband service

All of Starbucks offers free wifi, for instance.

Fifty-seven cities in the U.S., including Los Angeles, offer free wifi. Facebook and Cisco have joined to offer free wifi access to customers in any business who check in to Facebook. Facebook’s original free wifi test included just 25 stores in the Bay Area. The company has now expanded it to 1,000.

For some people, there is just no need for a cable or pipe to deliver the internet or TV to their residence specifically, as long as they are within range of a free wifi hotspot.

This chart shows the free wifi hotspots available in Jersey City, N.J. Most reasonably dense areas of the U.S. look like this now, according to Bright House Networks, a company that tracks and maps wifi hotspots:

Bright House Networks

SEE ALSO:  All Business Insider's Stories On The Death of TV

"The apology (such as it was) was at the tail end of the broadcast 60 Minutes"

Conservatives go mum about bogus Benghazi story

from: NATIONAL INTEREST  A BLOG BY DICK POLMAN

The apology (such as it was) surfaced at the tail end of the broadcast last night. 60 Minutes, having just been busted for nurturing a bogus Benghazi story over a span of 12 months, said it was sorry in a terse 90 seconds.

In recent days, everyone who values factual accuracy has been deploring the show's shoddy reporting, its flunking of Journalism 101. But barely a peep has been uttered by the usual right-wing suspects and Republican politicians who continue to think that Benghazi is akin to Watergate. They hyped the Oct. 27 60 Minutes segment, hailing it as a landmark inside look at the Obama administration's security failures (Fox Nation called it "the first Western eyewitness to the deadly Benghazi terror attacks!"), but now that it turns out that the "eyewitness" was never there, the Benghazi obsessives have fallen mute. Gee, big surprise.

For those of you who haven't tracked the 60 Minutes story, and the subsequent story about the story, a quick recap should suffice: Correspondent Lara Logan hinged her report on the purported adventures of British security contractor Dylan Davies, who appeared on camera under a pseudonym. Davies, billed as the first eyewitness to dish about lax security at the diplomatic compound, said that he was compelled to ride to the rescue - scaling a 12-foot wall, bashing a terrorist with a rifle butt, later sneaking into a Bengahzi hospital and seeing the dead body of U.S. ambassador Chris Stevens...no wonder conservatives went nuts. What catnip!

And go nuts they did. Remember how they hated CBS News back in 2004, when the short-lived 60 Minutes II ran a bogus report about George W. Bush's service in the Air National Guard? Remember how they denounced that report as a hit job by Duh Liberal Media? Well, that was then. This time, all of a sudden, conservatives were in love with CBS News. This time, CBS News wasn't part of Duh Liberal Media at all - it was a truth-teller! An exemplar of objective journalism!

For instance: Fox news contributor Monica Crowley, on Twitter, hailed the network for being "among the very, very few reporting on this grave & outrageous scandal." The Heritage Foundation's blog declared: "This scandal will not go away. As a result of CBS reporter Lara Logan's report, the blogosphere has erupted in recriminations over Benghazi all over again. At the center of the piece is one of the few eyewitness accounts to the attack on the record..." Fox host Bret Baier lauded the broadcast by "one of journalism's heavy hitters." Fox & Friends co-host Steve Doocy praised the network for "finally catching up" with the conservative media, because, after all, "60 Minutes doesn't cover phony scandals."

Turned out, however, that 60 Minutes had ginned up a phony story; in bits and pieces, over a period of 10 days, it unraveled. On Oct. 31, The Washington Postdisclosed that Davies, in the immediate aftermath of the Benghazi attack, had filed an incident report with his security employer, Blue Mountain, stipulating that he had been nowhere near the compound, that he never scaled a wall or rifle-butted a bad guy or saw ambassador Stevens' body - and that, instead, he spent most of the night at his Benghazi beachside villa.

In response to the Post report, which raised serious questions about Davies' credibility, CBS News stonewalled; it vowed to "stand firmly by the story we broadcast." CBS News chairman Jeff Fager told The Huffington Post that he was "proud" of the story and "confident:" about Davies. Meanwhile, Davies told The Daily Beast website that he had lied to his employer in the incident report, that he really was inside the compound even though he'd told Blue Mountain that he hadn't been. And in a statement that ran in The New York Times, Davies said that his new inside-the-compound account "is consistent with what I gave to the FBI."

Not!

Oh what a tangled web he weaved, having practiced to deceive. Last Thursday night, The Times reported that Davies told the FBI the exact same thing he had written in his Blue Mountain report - that he was nowhere near the Benghazi compound. And suddenly, CBS News ditched stonewall mode and went belly up. That same night, Logan's story vanished from the website. Fager said early Friday, "CBS News confirmed with our own sources at the FBI that the story (Davies) told the FBI was not in agreement with what we were told." Logan went on CBS This Morning with her initial apology: "We were wrong to put (Davies) on the air." Shefollowed up last night.

Lingering questions abound. How is it possible, having worked on this story for a year, that Logan and her crew didn't know about the Blue Mountain incident report? How is it possible that, over the span of a year, they didn't know what Davies had said to the FBI - until it "confirmed" the truth after the story blew up? Or did they simply not want to know that their linchpin source was a liar? Can their lapses be linked in any way to CBS' conflict of interest - the fact that Davies had a hot book deal, featuring his "eyewitness" account, with a conservative imprint at Simon & Schuster... which just so happens to be a subsidiary of the CBS Corporation?

But hey, don't expect the conservative echo chamber to demand any answers - particularly about the CBS conflict of interest. Better to just pretend that the ballyhooed story never happened, or to just briefly note its bogus-ness (as Fox News' Bret Baier did last Friday, in a brisk 26 seconds).

This is good news for the folks at 60 Minutes, because when conservatives went ballistic in the wake of that '04 Bush-National Guard report, heads rolled at the network. But this time, because 60 Minutes sought to serve up red meat to the Republican right (albeit with bad reporting), conservatives are staying mum, and giving it a pass. After all, it's the thought that counts.

Norbert Weiner - an open letter

[An open letter published in the Atlantic Monthly magazine, January 1947 issue which could be subtitled personally as "Why I Often Argue Against Science and “Scientists” When It Seems by the Nature of My Opinions That I Would Not." Norbert Wiener was a profoundly brilliant man. I am currently reading his book: The Human Use of Human Beings.]

A Scientist Rebels

The letter which follows was addressed by one of our ranking mathematicians to a research scientist of a great aircraft corporation, who had asked him for the technical account of a certain line of research he had conducted in the war. Professor Wiener's indignation at being requested to participate in indiscriminate rearmament, less than two years after victory, is typical of many American scientists who served their country faithfully during the war.

Professor of Mathematics in one of our great Eastern institutions, Norbert Wiener was born in Columbia, Missouri, in 1894, the son of Leo Wiener, Professor of Slavic Languages at Harvard University. He took his doctorate at Harvard and did his graduate work in England and in Gottingen. Today he is esteemed one of the world's foremost mathematical analysts. His ideas played a significant part in the development of the theories of communication and control which were essential in winning the war.

- The Editor, Atlantic Monthly

 

Sir:-

I have received from you a note in which you state that you are engaged in a project concerning controlled missiles, and in which you request a copy of a paper which I wrote for the National Defense Research Committee during the war.

As the paper is the property of a government organization, you are of course at complete liberty to turn to that government organization for such information as I could give you. If it is out of print as you say, and they desire to make it available for you, there are doubtless proper avenues of approach to them.

When, however, you turn to me for information concerning controlled missiles, there are several considerations which determine my reply. In the past, the comity of scholars has made it a custom to furnish scientific information to any person seriously seeking it. However, we must face these facts: the policy of the government itself during and after the war, say in the bombing of Hiroshima and Nagasaki, has made it clear that to provide scientific information is not a necessarily innocent act, and may entail the gravest consequences.

One therefore cannot escape reconsidering the established custom of the scientist to give information to every person who may enquire of him. The interchange of ideas which is one of the great traditions of science must of course receive certain limitations when the scientist becomes an arbiter of life and death.

For the sake, however, of the scientist and the public, these limitations should be as intelligent as possible. The measures taken during the war by our military agencies, in restricting the free intercourse among scientists on related projects or even on the same project, have gone so far that it is clear that if continued in time of peace this policy will lead to the total irresponsibility of the scientist, and ultimately to the death of science. Both of these are disastrous for our civilization, and entail grave and immediate peril for the public.

I realize, of course, that I am acting as the censor of my own ideas, and it may sound arbitrary, but I will not accept a censorship in which I do not participate. The experience of the scientists who have worked on the atomic bomb has indicated that in any investigation of this kind the scientist ends by putting unlimited powers in the hands of the people whom he is least inclined to trust with their use. It is perfectly clear also that to disseminate information about a weapon in the present state of our civilization is to make it practically certain that that weapon will be used. In that respect the controlled missile represents the still imperfect supplement to the atom bomb and to bacterial warfare.

The practical use of guided missiles can only be to kill foreign civilians indiscriminately, and it furnishes no protection whatsoever to civilians in this country. I cannot conceive a situation in which such weapons can produce any effect other than extending the kamikaze way of fighting to whole nations. Their possession can do nothing but endanger us by encouraging the tragic insolence of the military mind.

If therefore I do not desire to participate in the bombing or poisoning of defenseless peoples - and I most certainly do not - I must take a serious responsibility as to those to whom I disclose my scientific ideas. Since it is obvious that with sufficient effort you can obtain my material, even though it is out of print, I can only protest pro forma in refusing to give you any information concerning my past work. However, I rejoice at the fact that my material is not readily available, inasmuch as it gives me the opportunity to raise this serious moral issue. I do not expect to publish any future work of mine which may do damage in the hands of irresponsible militarists.

I am taking the liberty of calling this letter to the attention of other people in scientific work. I believe it is only proper that they should know of it in order to make their own independent decisions, if similar situations should confront them.

Norbert Wiener

Supreme Court decision, Shelby County v. Holder, is leading to voter suppression, parallels the pre-1960s era

The U.S. Needs a Constitutional Right to Vote

Draconian new laws restrict suffrage in North Carolina, Texas, and Alabama—and point to a glaring omission.

Norm Ornstein, The Atlantic, OCT 31 2013

Gary Cameron/Reuters

It is becoming increasingly obvious that the Supreme Court decision in Shelby County v. Holder, which eviscerated the Voting Rights Act, is leading to a new era of voter suppression that parallels the pre-1960s era—this time affecting not just African-Americans but also Hispanic-Americans, women, and students, among others.
The reasoning employed by Chief Justice John Roberts in Shelby County—that Section 5 of the act was such a spectacular success that it is no longer necessary—was the equivalent of taking down speed cameras and traffic lights and removing speed limits from a dangerous intersection because they had combined to reduce accidents and traffic deaths.
In North Carolina, a post-Shelby County law not only includes one of the most restrictive and punitive voter-ID laws anywhere but also restricts early voting, eliminates same-day voting registration, ends pre-registration for 16- and 17-year-olds, and bans many provisional ballots. Whatever flimsy voter-fraud excuse exists for requiring voter ID disappears when it comes to these other obstacles to voting.
In Texas, the law could require voters to travel as much as 250 miles to obtain an acceptable voter ID—and it allows a concealed-weapon permit, but not a student ID, as proof of identity for voting. Moreover, the law and the regulations to implement it, we are now learning, will create huge impediments for women who have married or divorced and have voter IDs and driver's licenses that reflect maiden or married names that do not exactly match. It raises similar problems for Mexican-Americans who use combinations of mothers' and fathers' names.
In a recent election on constitutional issues, a female Texas District Court judge, Sandra Watts, who has voted for 49 years in the state, was challenged in the same courthouse where she presides; to overcome the challenge, she will have to jump through hoops and possibly pay for a copy of her marriage license, an effective poll tax on women.
The Justice Department is challenging both laws, but through a much more cumbersome and rarely successful provision of the Voting Rights Act that is still in force. It cannot prevent these laws and others implemented by state and local jurisdictions, many of which will take effect below the radar and will not be challenged because of the expense and difficulty of litigation.
Voter suppression is nothing new in America, as the pre-civil-rights era underscores. But it is profoundly un-American. The Texas law, promoted aggressively by state Attorney General Greg Abbott, the GOP choice for governor in next year's election, establishes the kinds of obstacles and impediments to voting that are more akin to Vladimir Putin's Russia than to the United States.

Voter suppression is nothing new in America, as the pre-civil-rights era underscores. But it is profoundly un-American.

Looking at the demographics in Texas, the Republican authors of the law decided that suppressing votes was easier than changing either policies or approaches to appeal to the emerging elements of the state's electorate. In Virginia, with polls showing that Democratic gubernatorial candidate Terry McAuliffe's robust lead over Republican opponent Ken Cuccinelli is driven by a huge gender gap, it is not surprising that Republicans in Texas are trying to suppress the votes of women as much as those of Hispanic-Americans.
A new Voting Rights Act would help to ameliorate some of these problems, especially if it applied nationwide (many of the restrictive laws are occurring in non-Southern states such as Indiana and Kansas). I have previously suggested a host of areas that could be included in a VRA 2.0 to make voting easier and more convenient. But despite the endorsement of a new VRA by influential Republicans such as Rep. Jim Sensenbrenner of Wisconsin, the odds of enacting new voting-rights legislation in today's thoroughly dysfunctional and hyperpartisan Congress are slim.
The effort should be accelerated. We need a modernized voter-registration system, weekend elections, and a host of other practices to make voting easier. But we also need to focus on an even more audacious and broader effort—a constitutional amendment protecting the right to vote.
Many, if not most, Americans are unaware that the Constitution contains no explicit right to vote. To be sure, such a right is implicit in the Fifteenth, Nineteenth, and Twenty-Sixth amendments that deal with voting discrimination based on race, gender, and age. But the lack of an explicit right opens the door to the courts' ratifying the sweeping kinds of voter-restrictions and voter-suppression tactics that are becoming depressingly common.
An explicit constitutional right to vote would give traction to individual Americans who are facing these tactics, and to legal cases challenging restrictive laws. The courts have up to now said that the concern about voter fraud—largely manufactured and exaggerated—provides an opening for severe restrictions on voting by many groups of Americans. That balance would have to shift in the face of an explicit right to vote. Finally, a major national debate on this issue would alert and educate voters to the twin realities: There is no right to vote in the Constitution, and many political actors are trying to take away what should be that right from many millions of Americans.
Reps. Mark Pocan, D-Wis., and Keith Ellison, D-Minn., have introduced in Congress a constitutional amendment that would guarantee the right to vote. It has garnered little attention and no momentum. Now is the time to change that dynamic before more states decide to be Putinesque with our democracy.