Humanity has been watching TV since the 1940s. Back then everything was black and white, the introduction of color broadcasting started a couple of years later. Since that point, there really has not been any significant progress of the whole concept “watching TV”. Yes, we have broadcasts in 1080p now and our televisions look nice and sleek now, but the general concept stayed the same. You choose a particular channel and watch whatever the show producers come up with.
Not surprisingly, more and more people are turning away from traditional TV consumption towards online streaming services. This trend is especially visible in the 16-24 yrs. age segment. As a result, TV channels find themselves in a difficult position. Should they embrace the fact that their audience is shifting more towards older people? Or should they use their limited broadcasting time to retain the young demographics?
Let’s look at their biggest competitor: online streaming services.
Currently, the US video streaming market weighs $6.62 billion and over 85% of all broadband households subscribe to at least one offering (Netflix being the market leader). When it comes to non-subscription based online services, YouTube exceeds the reach of Netflix by an order (!) of magnitude (see graph below).
So, what happens when the TV industry tries to cope with the threat of Netflix and Youtube?
A few days ago, Google announced that they are partnering with major US broadcasters to create an online streaming service for watching live TV. Costing $35 a month, the service allows customers in selected US cities to watch channels on all their devices and even record shows for delayed entertainment.
To me, Youtube TV appears to be a (desperate) effort of the TV industry to stop young people from completely turning their back on traditional TV. In my opinion, they have missed the opportunity of transitioning to digital platforms themselves. Most of their own digital services (Facebook Groups, Smartphone Apps, Websites) are not designed with the wants of our generation in mind. Thereby, they fail to create a social component that retains viewers.
Still, it might be that the overall concept of having limited ability to choose content is just outdated. If that’s the case, then they will have a hard time competing long-term with experienced video-on-demand services such as Netflix or Amazon Video.
Where do you think the TV industry is heading? Can services such as YouTube TV help to make traditional TV more relevant to you? Would love to hear your opinions in the comments!