Future of Cable TV

In the last 20 years, the median age of Americans has increased from 34 to 37. The median age of broadcast TV viewers has increased from 41 to 54. Not a three-year jump, but a 13-year jump.

Case in point: in the 1993-94 broadcast season, Home Improvement was the most-watched show, with a median viewer of 34. Today, it’s NCIS, with a median viewer who is 61.

I'm guessing these numbers will continue to climb higher. Whether they know it or not, the networks are in serious trouble.

Quote: reno

I'm guessing these numbers will continue to climb higher. Whether they know it or not, the networks are in serious trouble.

They have been for years but like the Detroit Automakers they ignore it. But to be fair, in reality all the networks can do is play a defensive strategy. They used to have about 90% of the market and now IIRC they are barely 50%. Their problem now is their costs are such that they cannot male it unless they have a major hit.

While the old premiere-week-the-week-after-labor-day model is dead, what also may need to die is the 22 episode season. It just may be too long of a season to fill with storyline. Consider cable series like "Breaking Bad" or "The Sopranos." 12 episodes or so is the max they do. On TV when the show dies 5 weeks in the slot needs to be filled.

Quote: reno

I'm guessing these numbers will continue to climb higher. Whether they know it or not, the networks are in serious trouble.

"The Big Bang Theory," which shot up to third place from eighth, in advertising revenue. As the most-watched show on broadcast TV among the all-important adult 18-to-49 demo, "The Big Bang Theory" has become increasingly valuable to advertisers, with the average cost for a 30-second spot rising to 15% to $316,912.

If younger people don't purchase Cable TV, and rely on antennas and digital media, they may shift the balance back to broadcast.

Quote: Pacomartin

If younger people don't purchase Cable TV, and rely on antennas and digital media, they may shift the balance back to broadcast.

If they do it will be very minimal. They are watching things online, on their own schedule. I'm no kid but I am a cord-cutter and 95% of what I watch is online in one form or another.

Quote: AZDuffman

I'm no kid but I am a cord-cutter and 95% of what I watch is online in one form or another.

One way to look at it is money. I think cable brings in over $100 billion per year in revenue (but I think that includes internet and telephone), advertising on cable is $30 billion, and Direct TV is $30 billion, and Dish Network is $14 billion. Movie tickets bring in another $11 billion. I think broadcast TV is roughly $40 billion, newspapers are $28 billion and magazines are $24 billion.

Now in theory you could replace that with maybe $60 billion to bring internet to households in America, and if they only watched commercial free services like Netflix that would be another $12 billion. Advertising would still be possible on digital media, but people will try and screen out digital ads as much as possible.

The media industry is not going to commit seppuku and slice out their guts. They will guard that revenue as much as possible.

Quote: Pacomartin

The media industry is not going to commit seppuku and slice out their guts. They will guard that revenue as much as possible.

All industries will.

Look at electric utilities. When customers started to look at alternatives for all or even a portion of their electric bill, the utilities rushed to court saying "protect our monopoly" else all our customers may try to nickle and dime us to death by getting small generators or wind turbines.

Cable companies have one thing going for them. The Cables. They invested in those trucks and cable franchises... all these Silicon Valley hippie types can talk about "the last mile" but its the Cable Companies who will be guarding it.

Quote: Fleastiff

All industries will.

It is difficult to understand the potential economics.

For 177 episodes of Two and a Half Men over 386 weeks viewership was between 10.16 and 24.24 million people. Consistent with hit sitcoms Charlie Sheen was being paid almost 2 million a week at the end, and had a net worth of $125 million.

Following the new business model 10/90 he made 10 episodes of Anger Management which averaged 3 million viewers apiece (not surprising given his notoriety). The network gives the go ahead to make 90 more episodes. The first 51 of those episodes aired over 59 weeks and had 0.62 to 1.82 million viewers.

Following the business model, Charlie Sheen defers most of his pay until the show reaches 100 episodes and is sold into syndication. Charlie Sheen is supposed to get a minimum of $150 million when that happens (roughly October of this year).

It's difficult to see how that much money by one actor could be made from such a low ranking TV series. Why would TV networks pay premium money just to air a show whose ratings were so low that it wouldn't even make it on broadcast TV?

Perhaps because TV networks are run by executives with conflicting opinions as to corporate risk and who are perhaps not entirely blindly loyal to the network, there being so many inter-locking relationships and expectations in the business. A tv executive is someone who spends the shareholder's money to make himself richer.

Decades ago some Sony Records executive was caught with his hand in the till to the tune of ten grand. A lesser employee would have been fired for stealing ten dollars from a petit cash box, but the executive had made millions ... and when the law gave him a slap on the wrist his employer gave him some wrist balm.

The digital insertion of advertisements into reruns has increased the take from syndication. In many cases the shows have advertisements from items that did not exist when the show was filmed.


After "Chuck" aired 35 episodes the network was considering cancelling the show because the ratings were lukewarm. Fans flooded Subway sandwich shops and began buying product to support the show. Subway agreed to shell out more money if the dialogue was rewritten so that the characters began to have near orgasms over eating subway sandwiches.

Quote: Pacomartin

... if the dialogue was rewritten so that the characters began to have near orgasms over eating subway sandwiches.

Although some might say that was prostitution, its clear it would be really great acting!!