Once again, the death of TV is being debated.
In one corner is former analyst Henry Blodget, representing the industry’s morticians. Blodget now runs the Business Insider website, which on Sunday published an article with the headline “Don’t Mean To Be Alarmist, But The TV Business May Be Starting To Collapse.”
In the other corner is former media agency researcher-turned-Pivotal Research Group analyst Brian Wieser.
Wieser notes that the demise of TV has been predicted many times before, with cause of death being attributed to the VCR, the DVR and now an increasingly digital and on-demand lifestyle.
But Wieser says that “while [Blodget’s] article is certainly thoughtful and among the most detailed we have read on the topic, we fundamentally disagree with many of the article’s underlying data points and related conjecture. Thus we also disagree with the conclusions.”
On an almost point-by-point basis, Wieser looks at Blodget’s assertions about trends affecting the TV business and says that while the opinions are fashionable, the data says something else.
For example, while Blodget claims that “we almost never watch television shows when they are broadcast anymore,” Wieser points out that 83% of TV viewing still occurs on a live basis, according to Nielsen.
When Blodget asserts that “networks are meaningless” and that what’s important is whether a desired show is available via Netflix, Hulu, Amazon or iTunes, Wieser counters that while viewer watch programs, they are also loyal to “genres of programming and the networks which are synonymous with those genres.”
And when Blodget says “the vast majority of money TV advertisers spend to reach our household… is wasted, because we rarely watch TV content with ads, and when we do, we rarely watch the ads,” Wieser counters that “companies such as TRA have established methodologies to triangulate between viewing data and purchasing data and would be able to provide a broader statement of whether or not households fitting a certain profile directly purchased goods.”
He adds that since TV is a one-to-many medium, “there will inevitably be some advertising which is wasted under any circumstance. The question will always be whether or not a marketer had a better alternative available to accomplish the goal they were seeking.”
Interestingly, Wieser writes his rebuttal as he initiates coverage of CBS. Wieser notes that CBS “is uniquely dependent on the prospects of health for the television industry in the U.S. and around the world,” and despite the gloom and doom predictions by the Blodgets of the world, he’s recommending that investors bet
on Les Moonves and his Tiffany network.
Blodgett’s thesis was also critiqued by top industry thinkers at B&C’s TV 3.0 Conference in New York Wednesday.
Irwin Gotlieb, CEO of media agency GroupM, said that Blodget erred by assuming the
bahevior in his household was the norm for all consumers.
“With all due respect to him, he’s totally wrong,” said Gotlieb, a member o f the B&C Hall of Fame. “One should never do sample-of-one research.”
High-earning, Type A sophisticates may skip ads, said Gotlieb, but much of the country still watches live TV — and the commercials.
“To tell you the truth, I think it’s a more nuanced answer than that,” said Tom Rogers, CEO of TiVo, who’s DVRs were originally seen as a TV advertising killer. “There are those who are championing the television business as it is. Then there are people like Henry who think it’s all over. I think the right answer lies somewhere in between.”
Rogers said that “there are elements of the television industry that are challenged, but the television industry is doing a hell of a lot better than newspapers and music.”
The television networks “certainly have created credibility for the idea for the transition of television… through the digital age,” Rogers said. And that they “will stay meaningful and largely intact.”
But in order to in order to avoid the fate imagined by Blodget, “operators and programmers need to be paranoid, and continue to study all the new data on viewer behavior,” said David Zaslav, CEO of Discovery
Disagreeing with Blodget, Zaslav pointed to TV industry growth. “People are watching more TV than they ever have, there is huge growth outside the U.S., there is huge growth which we’re seeing and which we’re trying to reap the benefit of, we’re growing our brands, we’re growing channels, we’re building affinity groups around them,” he said.
“Having said that we can’t ignore fact that things are changing, and if they do change, then stronger brands, great shows and great characters are going to be currency in any new world,” he added.
“We have to have a part of our company making believe the world hasn’t changed and just make every channel we have stronger and more important, and we have to have a portion of our company assuming that Henry Blodgett is right about everything and therefore what does that mean for us in terms of our content running on all these new platforms,” Zaslav said. “I think in the end he’s more wrong than right, but we will have to wait and see.”
(Thanks to my collegues Mike Malone, Todd Spangler and Mike Farrell for their notes from the TV 3.0 Conference.)