Fast Company

How Long Can Free Broadcast TV Last? Not Long, Perhaps

Though Time Warner's CEO Jeff Bewkes has his own agenda to push regarding the future of TV, speaking to the Daily Beast recently he mentioned the future of free-to-air TV. He thinks it hasn't got one, and he may have a point.

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Among various other pronouncements on Time Warner's business, Bewkes was asked about how free TV's future might go, and he didn't mince his words: "their business model is becoming increasingly not viable" before long, if they don't enforce some kind of carriage fee they "may not survive."

Is Bewkes merely trotting out the same old line about the future of the TV (and newspapers and books and...) being on the Internet and as paid-for content? Kinda. But he backs up his thinking with some sensible points: Fewer people are watching the free broadcast networks, they're doing so for fewer hours each day, and ratings are sliding ever downwards. In terms of money the advertising revenues are down (probably a knock-on from the economic low as well as real-term decline) and that leads to reduced earnings, and thus lower spend on shows. And that is the point at which you begin to get a death-spiral: Less cash spent on programming can easily translate into less attractive shows, which then pushes viewing figures further downwards. Factor in news like Oprah Winfrey's thoughts on moving her top-rated show from broadcast TV to a future cable channel she owns with Discovery Communications, and the future does look slightly bleak for broadcast television.

Did the Internet do all this? Not really--it's a combination of things, including streaming shows over Net-TV systems like Hulu, but also the recession, aggressive tactics from cable TV companies and booming technology. Which Bewkes thinks is actually a good thing for the media industry as a whole. He sees consumers becoming used to accessing their content over many different platforms: Set-top boxes, netbooks, TV-connected PCs, tablets, and smartphones. He also suggests that consumers will be getting a double-whammy from media in the future: You'll have to pay for it, and you'll also get advertising forced on you.

That's a way of thinking that's extremely U.S.-centric, since in the U.K. the venerable old BBC manages a free-to-air broadcast of two separate domestic channels (and a huge rag-bag of extra content channels over free-to-view digital TV and paid cable and satellite systems) thanks to income from the tax-like TV licensing system. No one's suggesting that Time Warner, or any other U.S. operator, would ever switch to this sort of system but the BBC does deliver its programming (highly regarded around the globe) without adverts as a reward for paying the license access fee. Free to air TV is also likely to continue being successful across Europe, where there are fewer monopolistic cable and satellite companies--like Bewkes' one--placing a stranglehold on free broadcast networks.

[Via TheDailyBeast]

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2 Comments

  • Richard Geller

    I guess I no longer see the need for broadcast TV. It's far more convenient to get content online. I do believe content quality is one of the critical factors, however. What if one of our networks did an absolutely outstanding job at balanced, reliable, informed, investigative broadcast journalism? (There was a time when CBS was exactly that.) Would they generate wide viewership? My guess is they would gain a global audience. In my cracked crystal ball, I see news channels online becoming more and more of a competition for worldwide viewership and rightly so. And advertisers will jump onboard. We will need to know (more and more) how others in the world are viewing the news.

    --
    Richard Geller
    http://www.aSiteAboutSomething...

  • Richard Geller

    I guess I no longer see the need for broadcast TV. It's far more convenient to get content online. I do believe content quality is one of the critical factors, however. What if one of our networks did an absolutely outstanding job at balanced, reliable, informed, investigative broadcast journalism? (There was a time when CBS was exactly that.) Would they generate wide viewership? My guess is they would gain a global audience. In my cracked crystal ball, I see news channels online becoming more and more of a competition for worldwide viewership and rightly so. And advertisers will jump onboard. We will need to know (more and more) how others in the world are viewing the news.

    --
    Richard Geller
    http://www.aSiteAboutSomething...