Traditional wisdom has long held that advertising dollars follow audiences, but sometimes are subject to a slight delay. That may be true, but in the case of television advertising, it may be too big of a delay due to how rapidly the landscape is changing.
There is no longer any denying that streaming has taken over as the dominant method of watching television. Traditional streaming services like Netflix, Hulu and Amazon Prime already cut into many people’s need for cable or satellite television because the shows they wanted to watch could be accessed for a cheaper price and at their leisure. New streaming services such as HBO Max and Disney+ only make the situation for traditional television carriers worse.
But with the advent of live television streaming from the likes of Sling, YouTube TV, Fubo and Hulu Live TV, those traditional television providers have been dealt a crucial blow.
Roku, one of the biggest streaming hardware manufacturers, recorded 58.7 billion streaming hours in 2021, compared to 10 billion five years ago. eMarketer estimates that the number of households with linear television service has declined by 23% since 2014 and by 2023, fewer than half of all U.S. households will pay for a traditional TV service.
As it stands, live television is supported almost entirely by sports. In 2021, 95 of the 100 most watched telecasts were sporting events. The only non-sports telecasts in the top 30 were the Inauguration of President Joe Biden & VP Kamala Harris at number seven and President Biden’s address to Congress at 17. To find the first non-sports or political telecast, you need to go all the way down to 32 for the Macy’s Thanksgiving Day Parade. The only scripted telecast was The Equalizer at 38, which aired directly after the Super Bowl.
The Academy Awards, usually a mainstay in the most-watched events of the year, suffered a record low viewership. Only 10.4 million people watched the ceremony, a sharp decrease from 23.6 million in 2020 (which was virtual). A decade ago, the show regularly attracted around 40 million viewers.
But at this current point in time, it’s difficult to tell what the future of live streaming will be. It’s even harder to tell if we are still in the midst of the live streaming revolution or if we are at the peak and teetering on the fall.
Sports may be the only thing propping up live television, but it’s an unsteady foundation for a number of reasons. Contract and carriage disputes are nothing new, but they have increased in both frequency and scope recently with the boom of live streaming. YouTubeTV, one of the largest live streaming services, if not the biggest, recently lost Disney-owned properties for a whole weekend, including the ESPN family of networks, ABC, the FX networks, and other Disney stations like Disney Channel and Freeform.
The Bally Sports Networks, which hosts regional sports programming around the country, are currently unavailable to stream. Here in Louisiana, the New Orleans Pelicans cannot be seen on live streaming services because the majority of their home games air on a Bally affiliate. The Sinclair-owned network is expected to launch their own live streaming platform sometime this year, which would be the first station-specific streaming service. If that platform is successful, other networks can be expected to follow suit, especially ones that already have the infrastructure in place.
ESPN, owned by Disney, already has an extremely well-established platform with a huge number of subscribers in ESPN+. The threat of ESPN, the leader in sports television, pulling out of live TV entirely is not completely off the table. NBC Universal and CBS/Viacom, two major players in the sports market, also have their own paid live streaming service with Peacock and Paramount+. The only major network without a practical live streaming service to put their content behind is FOX, and they could potentially retrofit the ad supported Tubi to serve that role. If people are willing to pay for these services separately, the landscape of television could be irrevocably altered.
In the past, television more often than not came from cable companies. With streaming (both live and traditional) cutting deep into their cash cow of bundling internet, television and phones, those companies have responded by consistently raising internet prices to discourage the practice. The original appeal of streaming was that it was markedly cheaper than paying for an all-inclusive bundle, but with the rising cost of internet-only packages with the capability to support the bandwidth associated with streaming and the rising costs of the streaming services itself, we are approaching the point where streaming costs as much as cable did originally, expect with more headaches.
It's hard to know whether or not cable can really make a comeback, and even harder to know what the future of television will look like. Advertisers have to keep their fingers on the pulse of the industry moving forward and watch any changes like a hawk.