Tuesday, January 24, 2012

Younger Audiences Prefer Their Online Content

While championship sporting events will continue to get huge audiences on the TV, everyday TV viewership has some serious competition. The next generation of key demographics are spending less time with network and cable programming and shifting a chunk of their viewing time to online. YouTube is drawing the largest audience with its assortment of channels and shows. "With 125 million viewers watching more than 1 billion of its videos a month, Machinima may be the most-watched channel that's not on TV." They are eyeballs diverted from traditional television.

It is this fundamental shift in viewing that will ultimately affect what exists in a cable line-up and what is best discovered online. Like the music industry that saw consumers prefer to consume songs over albums, viewers may be preferring to view shows over networks, in an on demand way. No more waiting for a show to start, these viewers want it when they want, where they want, and on the devices they want.

"Machinima is part of what's been called the "third wave" in video entertainment, each part of which revolutionized the entertainment industry, (Machinima Inc. Chief Executive Allen) DeBevoise said. ABC, CBS and NBC dominated the broadcast-television era. Cable and satellite technology opened the doors to new, more specialized entertainment channels, including HBO, ESPN, MTV and CNN. Now the Internet is poised to overturn the reigning paradigm yet again, he said." The platform before it does not die; but it must find away to adapt to compete in a changing landscape.

To me, that means that cable networks and shows must be made fully accessible across all devices, whether viewed in the home or not. Live programming must be accessible everywhere immediately and all other programming available to watch as demanded. Will consumers pay? Ultimately, consumers don't want to pay; some however may pay depending on the value that programming presents to them. But at today's cost for cable, the younger generation is turning away from that model to view online.

Machinima may just prove that an online network can not only exist outside the cable subscription world, but also succeed without a license fee revenue model piggybacked on its ad sales success.

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