The redefinition of the television medium – which many of us have been talking about speculatively since before the turn of this century – is becoming a reality even sooner than expected.
Driven by wild fluctuations in consumer behaviour and the ever-increasing pace of technological change, the traditional means of assessing TV’s ROI are being subjected to renewed scrutiny.
The early numbers from the fall TV season have alarm bells ringing everywhere.
The major U.S. networks have seen new series ratings drop as much as 12% from last year, and many of the most popular returning shows are also declining, which makes the overall slump even worse.
The worries are being exacerbated by the types of viewers TV is losing, as much as by how many.
The ‘missing male’ viewer
Media researchers are particularly concerned about early ratings declines that have been estimated as high as 20% against the prized 18- to 34-year-old male demographic.
Where have they gone?
The reality is that young males are doing a lot more than just watching TV. They’re on their phones, listening to music, chatting on instant messaging services, sending e-mails, searching the Web and playing video games.
In fact, U.S. retail sales of video game hardware, software, and accessories outpaced the movie industry at $10.3 billion in 2002, a trend that is expected to continue this year and into next.
According to a study conducted by U.S. researcher Forrester, video game consoles were found in 38.5 million U.S. homes in 2002.
Another researcher, comScore Media Metrix found about 75% of the men in the 18- to 34-year-old demographic are on the Internet.
Nearly 27 million 18- to 34-year-old men used the Internet this past September, according to comScore – and they were on it a lot. They spent an average 32 hours per person during the month, viewing 3,370 pages in September compared to 2,645 average pages per user.
And if they’re not on the Internet chatting, shopping or playing games, they’re tuning in to other sources of entertainment, not found on primetime network TV.
TV is evolving faster than expected
Along with the proliferation of viewing choices and the challenges from other media, is the technological alteration of the TV medium itself.
Many critics questioned the long-term viability of digital video recording services like TiVo. But that skepticism is being revised now that TiVo has surpassed the one million subscription mark – ahead of schedule – thanks in part to its rollout with satellite provider DirecTV.
Not only that, but TiVo has shifted from being the set-top box source for digital video recording, to licensing its technology to consumer electronics manufacturers and offering the services on a subscription basis – changes that are sure to accelerate the widespread adaption of personal video recorders.
Toshiba and Pioneer are now offering DVD players with TiVo functionality and DirectTV has made a big marketing push on TiVo-enabled boxes.
TiVo has also been working hard to get into more retail channels, offering its products online through its own Web site and Amazon.com.
Many industry-watchers are now openly wondering how much longer the old advertising-supported TV model will withstand the pressures it faces.
One recent research paper from The Yankee Group analyzed the prospects for television advertising, and explored potential solutions for programmers and advertisers.
The report’s findings suggest:
* PVR penetration will grow to almost 20% of U.S. homes in less than four years
* Programmers must drive this transition or risk losing out to other media channels
* Guerrilla branding initiatives will be necessary as different creative products are required for different television advertising formats
* Changes in advertising paradigms will give rise to a new breed of cross-functional experts
* Privacy will be a critical issue for PVR downloads and targeted advertising
* Despite changes in the industry, the 30-second spot will remain the most widely used television-advertising format for the next five years
Other reports suggest that PVR penetration will come even more quickly, with one estimate as high as 20 million households by 2006.
As TV changes, so must TV measurement
What this all points to is the notion that TV advertising as a marketing vehicle – based on the premise of audience delivery – is an increasingly endangered concept. Recognizing TV as a strategic marketing vehicle, delivered and measured against its ability to drive bottom-line results for clients is the metric that should replace audience measurement.
In the meantime, TV will continue to underperform with respect to its potential.
The tools that measure the medium are antiquated. Until they are changed, TV will be seen for what it has done – but not for what it can do.
Bruce Claassen is president and CEO of the Toronto-based Genesis Media Group. He can be reached at: bclaassen@genesismedia.com.
