The pilot of the television series “Happy Days” was entitled “Love and the Television Set.” In the episode, set in the 1950s, the Cunninghams are the first family on the block with a television. Seeking to impress a girl, teenager Richie invites her over to his house to watch a boxing match with his family. Richie’s ploy doesn’t work because she is only interested in the television. The episode ends with Richie’s father staring at a blank television because he is also incredibly impressed by the new technology.
This iconic moment in media history depicts sports on television as appointment television — people arranging their schedules to watch a specific program at a specific time. For decades after that, appointment television was part of the American cultural milieu.
But this culture has changed. If you want to make money on stocks affiliated with the television industry, you should look at television from the perspective of young consumers who are now used to doing activities when they want to, and they’re not as impressed by the most advanced technologies as Richie’s date and father were by a television.
“A generational shift is happening, and viewers are no longer interested in shelling out hundreds of dollars for channels they don’t watch,” reports Forbes magazine in the article Online Streaming Is The Future Of Sports Broadcasting. “They also want access to their favorite programming on multiple devices, and the kind of “whenever you want, wherever you want” flexibility the internet has taught them to expect.”
Generation: NOW
The statistics on this generational shift are dramatic. Between 2011 and 2016, the number of hours per week Americans between the ages of 18 and 24 watched broadcast or cable television plunged from 24 to 1. They are now, in fact, watching more streaming video than “traditional television.”
Younger people are also watching less sports on “traditional television” than older generations. The decline is so alarming that an article about a survey of sports fans was entitled “Millennials Abandon Sports On TV, Posing Threat To Teams, Leagues, Broadcast Partners, Finds Study From L.E.K. Consulting.” The survey concluded that fans between 18 and 34 years old spend 13 percent of their “media time” on traditional TV, and 20 percent on online video services while people 35 and older spend 32 percent of their media time on traditional TV and 9 percent on online video services. The survey doesn’t specify the amount of media time.
“They’re watching Netflix and YouTube,” Tom Ascheim, the president of the cable network Freeform, told the authors of What’s the Future of Television. “They’re watching in their own way. People like choice and control. And I think the biggest shift for all of us is that we used to be in control, and now the consumer is in control.”
The Crystal Ball Says…
Wealth Authority scrutinized several studies about television’s future. It includes:
* More “Community-Based” Programming:
In traditional TV, sports commentators talked about games and issues and sports fans then talked about what the commentators talked about. In recent years, though, social media outlets like Facebook and Twitter have sparked conversations among fans. This Business Insider article says that some networks now find out what fans are talking about and then direct their commentary at those “communities.”
* More Content On Social Media “Channels”:
Would you like to guess how many hours of video are watched on Facebook every DAY? It’s 100 million, reports this Multichannel News article. And the article says Snapchat and YouTube have 8 billion and 5 billion video views every day. Posting sports-related videos on social media channels will reach an extraordinary amount of young people who can watch videos whenever they want to. The article points out that Twitter and Amazon Prime have bought the right to stream Thursday National Football League (NFL) games.
* Programs On More Devices:
Older people might find this hard to believe, but younger people are more frequently never buying televisions. They watch sports on smaller devices — and watch sports when they’re standing on a line or walking down the street. A Pew Research Center survey says the percentage of American adults who often get their news on a mobile device increased from 21 percent in 2013 to 45 percent in 2017. About 85 percent of American adults get at least some news via mobile devices.
* Direct Sales To Consumers:
Historically, content providers such as the NFL sold their product to television companies. In recent years, though, it has become technologically easier to stream video without selling the content to a TV network with tremendous bandwidth and network capacity, reports this article. Bypassing networks is called providing over-the-top (OTT) media services. This Sports Illustrated article says that media experts are predicting that the “next round” of sports TV deals will be with video streamers like Netflix rather than networks.
* More Customized Programming:
Have you ever bought a TV package that includes many channels you NEVER watch? These packages are becoming less acceptable to cost-conscious TV viewers, particularly younger viewers. “Skinny bundles” — less expensive packages with fewer stations — are becoming more popular. “Customers these days — especially those focused on sports — want to subscribe and follow their favorite games, races and matches,” Forbes reports. “They want to log in and see gourmet content catered for them, not an all-you-can-eat buffet.”
Which companies are best-positioned to deliver programs to people who want to watch videos? Which companies in the TV industry — if that’s what you want to call it given all of the changes — are the best choices for investors?
Keep up with Wealth Authority for the answers to those questions.
Regards,
Ethan Warrick
Editor
Wealth Authority
