by Jim Turner
It is a pretty obvious statement that “television” is radically different today than it was 5 years ago. The internet disruption that has affected every major type of media has hit television full force. Control of “TV” continues to shift more and more to the consumer, and the line between television and “online video” gets blurrier every day. The only thing for certain is that television will become unlike what we have even known by the end of the decade.
Start with the device itself. Once again, the “TV set” we all have at home is going through another change. This year at CES in January, the industry finalized a spec for “Ultra High Definition” (UHD) TV and ultimately we will all want one in our living room. The UHD spec has four elements: resolution, bit depth, color gamut, and high dynamic range (HDR) imaging. Resolution can be either 4k or 8K (4 times HD or 16 times HD) – but realistically, you only need the higher resolutions for screens over about 65” because the eye cannot perceive the difference less than that at normal viewing distances. However, the other three elements make a huge difference in the picture.
Bit depth refers to the number of bits assigned to each of the three colors (R, G, B) that make up every pixel on the screen - UHD moves that number from 8 bits to 10 bits. That seemingly small increase expands the Color Gamut from millions to billions of colors and gets within about 90% of the range of the human eye for the first time. HDR expands the range between the whitest white to the blackest black to over 10 times greater than HD sets.
New screen technologies are being used to deliver this new UHD picture including OLED and Quantum Dot displays; prices for 4K sets are falling faster than any consumer electronics device in history. All in all, the result is a stunning new picture that the analysts predict will be in 100M homes by 2019. But what content is there to watch on these new sets? Actually, not a lot.
You can get a small amount of UHD content over streaming services like Netflix, Amazon Prime and Sony (if you have broadband speeds of 25Mbps or higher) and also from new Blu-ray UHD players that are just coming to market. To get this new format out over the airwaves will require the ATSC 3.0 standard that is working its way through approval processes; most industry analysts expect it will be 2020 before we really see it emerge (and it will require another new TV set or an adapter…).
The much bigger impact, is on what we watch and how we watch it which is changing dramatically. Pay-TV services (and by extension broadcasters and networks) are under assault from cord-cutters and cord-shavers who are switching their eyeballs and subscription dollars to OTT (Over the Top) video services like Netflix, Hulu, Amazon, SlingTV and others. By the end of this year, the number of pay-tv subs will drop below 100M for the first time in many years and over 21% of US households will get their broadcast TV on at least one set in the home via an antenna, up from 17% just 2 years ago (which might turn out to be great news for local stations).
Over half of US households have at least one OTT subscription with Netflix clearly in the lead with over 45M subscribers in the US and over 81M globally. Netflix users watch an average of 7.7 hours per week on the service. An explosion of OTT services has occurred in the last year - there are over 105 OTT subscription services now and growing, from the big three of Netlfix, Hulu and Amazon Prime to pay-tv-like packages from SlingTV and others, to niche services like CuriousityStream and well-liked sports packages from the NFL, MLB and WWE.
With all this shifting, how and where we view programming is also changing rapidly. The long revered TV schedule has taken a huge hit except for important live events - according to Deloitte, over half of television viewing is now time shifted (53%) though VOD, apps, DVRs and OTT services. In fact, at the current rate, time spent watching “television” from an online source will surpass the time spent watching from traditional sources by 2018.
But – we still watch this online-delivered content on that big screen as over 65% of content from services like Netflix and Hulu is watched on a TV set in the home. Today, over half of US households have a TV connected to the internet and that is projected to reach 65% by 2019.
Mobile is playing a big role in TV just as it is in every other aspect of our lives – Facebook is streaming live programs, Twitter is streaming NFL programs this fall, and Millennials now watch television content almost equally between mobile devices and TV sets.
One of the upsides of all this change is that there is more quality television programming available now than ever in history. Scripted program production soared to a record high this year with 409 scripted shows in production – nearly 3 times what it was in 2000.
While advertisers have flocked to digital and online video, they also have recognized the continuing value of quality television. Advertisers now have many “television” options that carry the digital cache like VOD, TV Everywhere, and the like.
Don’t be fooled by the recent proclamations that digital video audiences are now as big and valuable as TV - digital services measure simultaneous viewers for as little as 3 seconds while a Nielsen rating reports the average viewers per minute across a show. If you do the math, digital still comes out much smaller than TV on a real viewership basis (for now anyway) – but that’s a whole other topic for another article…
What does all this mean? Television is changing rapidly; from the devices we use to watch programming to how we watch to what we even call “television.” This change will continue to accelerate over the next few years and what is ahead will be as dramatic and exciting as any shifts we have experienced in television. However it unfolds, there will always be demand for the high quality, professionally produced content we have always known as “television,” but how it is produced, delivered and consumed will be quite different over the next several years. Stay tuned!
- Jim Turner is the President of trnrMedia, a strategic advisory firm in advanced television and advertising, and is a member of the Board of Governors and First Vice President of the Chapter.