Our Insights

Don’t Count TV Out of Your Media Mix

July 22, 2019

Depending on what resource you’re using, you can always find proof for the argument you’re trying to make…thanks to the world wide web. With so much talk about digital trends and cord-cutters, traditional broadcast buyers are always being questioned: “How’s TV doing?”

The first question is, “What do you consider TV?” “TV” viewing has opened a new world about what viewers can see.  Now consumers can watch what they want to watch, when they want to watch and where they want to watch. TV viewing is no longer confined to the living room.

As a traditional broadcast buyer, I must rely on our good friend Mr. Nielsen.  I looked at one of our most consistently placed demos to see if people are using less broadcast TV in three Virginia markets: Norfolk, Richmond and DC.  Over a three-year period, PUTs showed only a 7-10% drop across all dayparts and months. Naturally, prime is the daypart most would think would feel the effects of user changes.  But among the three markets, prime lost only 9-12%.  In some markets, particularly DC, the biggest shift was in the 10-11pm time slot.  If you’re a true Virginia native, you know that our spring weather is unpredictable which apparently holds true to our viewing habits. March, April and May are the books with the most change. When it’s sunny and 75 one day and snowing the next week, your outside adventures turn into movie marathon day.

Next I looked at the cable penetration in Charlottesville, Richmond and Washington D.C.  Cable/ADS (ADS is defined as Dish and Direct TV) lost 2.5% in penetration in Charlottesville, 4.1% in Richmond and no change in Washington, DC.  Surprised by DC?  Not really – DC is a larger market with an ethnic mix of audiences who may have been less inclined to make the switch.

Given these declines, just how many are cutting the cord altogether in Virginia and watching apps and using the old antenna?  Interestingly, Richmond saw a huge percentage of people cutting the cord at 32.1% compared to Charlottesville at 10.4% and DC at 10.1%.  We were surprised that DC lost only 10% of their cord cutters, given that the median age is 37.1, which is less than Virginia overall and less than the US.  Actually, age doesn’t matter.  The PwC Study found that a quarter of consumers over 50 years old have cut the cord.  DC’s diverse audience when compared to VA/US averages may be indicative of why this percentage is low.

To back up our research, Nielsen came out with a recent study showing that TV was down by 13 minutes (4 hours and 8 minutes spent on TV in 2017 and 3 hours and 57 minutes in 2018).  More time is shifting to people using apps/websites on a smartphone or tablet and internet connected TV. News and trend reports seem to steer people’s perceptions to an overall belief that people aren’t watching traditional TV, but numbers are numbers.  We predict the increase of cord cutters will be minimal. According to a GfK MRI study, 71% of all US consumers have a TV cord and plan to keep it.  They remain loyal to their traditional TV services because of convenience, established channels and viewership.

TV viewing is like musical chairs. The industry has to keep up so that it isn’t lost in the clutter.  More and more outlets will be offering something “new and exciting” just to compete.  Look at the long list of streaming services:  Amazon Prime, Hulu, Acorn, DirecTV Now, Sling TV, T-Mobile TVision Home, FandangoNow and many more to evolve.

In conclusion, with all these established and new streaming services coming to market every day, our answer to “how’s TV doing” is that it is doing better than you might expect.  PUTs will continue to show decline in the traditional “TV” world, but I predict that it will not be in the drastic percentiles that viewers perceive. Where we go from here depends on how the media reports the “trends” and how our clients interpret these reports.   Remember, these reports are national.  Ask your buyers to analyze your market to find the truth.

On a side-note, we do highly recommend purchasing stock in the eye care industry. With viewing habits trending more to smaller screens, millennials will be like Mr. Magoo by the time they are 40. If you don’t know who Mr. Magoo is, you’re probably a millennial.

Christi Barbour
Senior Broadcast Specialist

Christi Barbour