I was having dinner with some tech-savvy twenty-somethings a few weeks ago, and the conversation turned to the media. I made a somewhat shocking discovery (at least to me): Most of these young adults are falling into a new territory of media consumption that could potentially eliminate the need for local television stations.
Nearly everyone told me that their household currently has a high-speed Internet connection, but no household connection to cable or satellite TV. I suppose I assumed the high-speed Internet connection went hand-in-hand with a cable/satellite subscription, but apparently I was wrong. The general consensus among the group was: “I don't need cable. Anything I want to watch on TV, I can get on the Internet.”
In this multimedia world, TV employees are getting more used to working in a multimedia environment. We already translate nearly everything we do onto the Internet.
But what happens when the Web starts to replace the television? Where is there a place in this environment for local television, local news or local television advertisers? Going to ABC.com to watch the most recent episodes of Ugly Betty or Grey's Anatomy is all well and good for the ABC Network, but what about the local ABC affiliate, whose revenue depends on viewers tuning in to their favorite ABC programs on local television? Is there a place in this new Internet-driven, consumer-focused media world for the local television affiliate?
Internet-driven viewing is bound to increase dramatically in the future, and local affiliates must find ways now to evolve into this new world. The TV execs are bound to look at this small subset of Internet-only-non-cable households and think that the number of homes falling into this category is too small to be of any worry.
But I did a quick check with Scarborough Research, and I estimate the total number of homes falling into this category to be about 7.5% of the total Tampa market. While 7.5% is not a huge figure, if you look at the adults 18-34 demo, 11.4% of these homes are Internet-only.
Our market ignored the impact of homes with only cellphones (no home phones), thinking that the number of homes was too small to worry about. When the percent of cellphone-only homes reached 18%, and Nielsen changed its methodology to include these homes, the resulting ratings drop caused TV general managers across the market to sit up and pay attention.
We cannot afford to sit back and wait to be surprised by the next great wave of changing media habits—the Internet-only, non-cable homes.