About 26 percent of customers who call U.S. cable TV companies request “Internet only” service, according to a survey of those calls by mobile advertising technology company Marchex. Of those customers, at least 60 percent actually end up getting Internet-only service, Marchex says.
The survey results—which came from 500 random phone calls via Marchex’s Call Analytics customer phone call monitoring technology—show that people increasingly don’t want to pay for old-fashioned TV. (Name one other industry where one in four consumers calls up the company to ask not to have access to its main product?)
In place of TV, consumers want the Internet—through which they can get the video they want, which can also include TV programming—instead.
And numbers from BI Intelligence show that digital media—following a boom on the mobile Web—is about to replace TV as the top venue for both audience share and ad revenue.
Chen Zhao, director of analytics for the Marchex Institute, told Business Insider, “It’s clear that consumers want very specific things from their cable providers—and at the most fundamental level, they increasingly just want a reliable Internet connection to serve as a gateway to their own channels and choices.”
The Internet is literally slicing up TV’s old business, according to new data from PwC. Look at how Netflix has become a head-to-head competitor to all of cable TV in the US:
- Cable subscriptions among 18-to-24-year-olds dropped to 71 percent in 2014, down 6 percent from the year before.
- 71 percent of pay TV subscribers ages 25 to 34 also had Netflix in 2014, up from 51 percent.
- 58 percent of 50-to-59-year-old TV subscribers also had Netflix in 2014, up from just 19 percent in 2013, the Wall Street Journal reported.
Back in 2011, data first emerged that television-watching may not, in the future, be the dominant media we consume—especially not in the living room, watching scheduled TV every night as people did in the 1970s. At the time three years ago, Credit Suisse alerted investors that pay TV subscriptions in the U.S. were in decline.
In the short time since that Credit Suisse report, most indicators have shown that TV’s share of both audience and ad dollars is in a long, slow decline as viewers move their attention to their phones, tablets, and laptops. The death of TV might not be as swift as that of the hard-line phone, but it’s happening.
However, it’s not until you see the following charts—compiled by BI Intelligence—that you realize in terms of viewers’ eyeballs and ad dollars, TV is already “over.”
TV has been relegated to second-rung status by the arrival of mobile media, in just the same way that newspapers and radio were demoted by the Internet.
Like newspapers and radio, TV still has a massive audience and commands lots of ad revenues. But TV’s audience simply isn’t as big as the audience being corralled by Google, Facebook, Apple, and their competitors.
Most people don’t understand this yet: Because TV routinely gets huge global audiences for things like the World Cup and the Super Bowl, it “feels” as if TV still has the biggest media audiences.
It doesn’t. The Internet and mobile Web combined have the biggest audiences. In a couple of years, they’ll also have the biggest bucket of ad revenue, too. (Ad dollars are always a year or two behind audiences.) TV is now a secondary concern if you want to reach viewers with either ads or content, data from BI Intelligence shows.
At Business Insider’s Ignition conference in New York, BI Intelligence prepared a chart that shows how TV is losing share of the media audience to online and mobile channels. TV no longer commands the largest portion of audience time. More importantly, digital media, at a 49 percent share, is close to claiming a simple majority of viewers media consumption.
TV lost its top spot in 2012. It’s now at only 37 percent of the market for eyeballs:
One of the reasons TV seems so dominant, even when it’s not, is that digital audience time is often broken into separate “online” and “mobile” buckets. Those distinctions are meaningless to consumers, of course. But slicing that distinction is the only way TV still comes out on top with audiences.
Here’s the breakout. TV only comes top if you split Web and mobile viewing:
Note that in 2014, mobile on its own is the second-biggest audience.
This, again, is a huge turning point in the world of media. The impact of mobile—which really only came online after 2007 and the launch of the iPhone—has vastly extended the reach of digital media. Web media might one day have eclipsed TV on its own. But that would have taken a lot longer without phones. It was the arrival of mobile media and video on the smartphone screen that really tipped the balance away from TV.
You’ve probably had that experience yourself: sitting on the sofa “watching” TV when you’re really looking at your phone or tablet.
The ad spending on Web and mobile is approaching the point at which it will eclipse TV, probably in 2017: