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CONTENT MATTERS

IDEAS THAT IMPACT THE CONTENT BUSINESS 

 

Culled from the headlines of the media and technology trade press by Katz’s Strategy, Analytics, and Research Team, Content Matters provides a periodic snapshot of news and issues that affect the business of creating, producing, and distributing content across TV, radio, and digital media. Here are this issue's 5 THINGS TO KNOW.

2019 Q1 Issue #1

 1   Netflix, Hulu restructure pricing.  Local stays connected.

Recently Netflix raised its monthly subscription price on each of its service tier levels. They’ve increased the price for their basic plan by 12.5%, 14.3% for the standard plan, and 18.2% for their premium plan. Market analysts do not anticipate this to have any negative impact upon their subscriber base because the perceived value offsets the moderate increases. Hulu may not have directly parried with their own announcement of a price reduction for its ad-supported base tier (although this is being offset with a price increase for their top-end streaming pay-TV service), but it does further demonstrate the volatility of the streaming ecosystem.

While Netflix and Hulu battle it out in a telecom-style price war, Amazon can just sit back and print money from its own basic service of delivering consumer goods along with audiences. CBS All-Access, DC Universe, HBO Go, all have platforms of their own. Soon Disney will be in the mix. And AT&T. And Viacom. And Verizon. And Walmart. Nearly any company with distribution channels or scale could be in the mix for streaming TV content. Netflix is even throwing in with the Academy, having been granted membership in the Motion Pictures Association of America, the only streaming service to join the six major movie studios in the lobbying group.

For years consumers have been clamoring for an a la carte system for their cable service. Well, the seeds of that desire have finally grown into a tree that’s bearing fruit – although it might not quite be as sweet as they’d expected.  Content choices have grown into a forest.

If a family of motivated viewers wanted access to much of the buzzed about content available now, it would be a bit more daunting than before. For example, if they wanted to watch Stranger Things, Game of Thrones, Marvelous Mrs. Maisel, A Handmaid’s Tale, Star Trek: Discovery and Titans, they would have to subscribe to Netflix, HBO, Amazon, Hulu, CBS All-Access, and DC Universe. Oh, and if they wanted to see the current season of The Walking Dead, they’d have to have a cable package tier that includes AMC. Don’t forget your passwords.

Local can be the oasis amid the chaos. By doubling down on their service to local communities, broadcasters build upon the touchstones of trust and direct practical connections to their viewers’ lives. Nobody’s streaming the 7-day forecast. Local television is unaffected by the end-user’s budget decisions.

While it’s important for local to create its own inroads into the streaming ecosystem to keep the platform level, it’s even more important for broadcasters to maximize what they do best: serve their local communities. While the streaming services tighten their Gordian Knot of content, local broadcasters can strengthen their relationship with their neighbors.

To get more perspective, check out Mediapost's recent article: Analysts Prove Favorable to Netflix Price Increase 

  

  2   OTT Can't Be "Off the Table" for Local Stations Anymore

Amazon launched in 1994. At that time, no one gave online shopping too much thought. Now it’s 2019 and 132-year-old Sears is on the verge of liquidation due to e-commerce. If it goes under, Sears will join Toys R Us, Sam Goody, Sports Authority, Blockbuster, and many more retailers who have been obliterated by online shopping.

Netflix launched in 1997. Nobody gave much thought to a mail-order DVD service. In 2007, Netflix begins streaming video, followed by Hulu, and shortly thereafter, retail-slayer Amazon.

Once the ecosystem changes, survival depends upon evolution and adaptation. Viewers are increasingly starting their night in the OTT space and through binging or “if you liked this…” suggestions, never leaving.  Viewing habits will inevitably continue to evolve as technology encourages it. Amazon has a closed-loop ecosystem, as Alexa will do your shopping from Amazon Prime for you from your couch, even without a second screen.

You can almost hear them chanting, "The sky is falling!  The sky is falling!"

All kidding aside, this is an exceptional opportunity for local broadcasters to launch into a very bright future, albeit outside its comfort zone.  While some data is pegging over 50% of viewers watching OTT television during Primetime, more realistic estimates on monitored devices (eg not what people SAY, but what they DO) point to a more moderate acceleration in changing habits.  Whatever the rate, change IS happening, so might it be time for stations to become a disruptor?

One major advantage local broadcasters still have – their unique, trusted content, particularly in news. CBS has unveiled a 24-hour OTT local news broadcast in the NY DMA. Others will likely follow. There may even be a bonus: OTT viewers skew younger than linear local news viewers, offering a potential opportunity for OTT to reinvigorate the viewer base.  That said, it's a complicated equation that local broadcasters have begun experimenting in - with mixed success.  The potential for attracting younger viewers must always be balanced with the reality of who the core linear viewer is today.  Broadcasters know they must be nimble to remain relevant - as long as they're always super-serving their core audience.

To get more perspective, check out TVnewscheck’s recent article, Stations Need To Forge Ahead With OTT, and Mediapost’s Could Local TV News Morph Into A Digital Media OTT Service?

 

  3   When Local is the Story

For many TV historians, HBO’s “The Sopranos” was a watershed in defining our current “Golden Age” of television.  It was also a watershed for Northern New Jersey.

TV makes one amazing PR tool. Great content can be transformative - and in more ways than you might first think.

For the first time in a long time, possibly since CBS aired “Dallas” through the mid 80’s, "location" means so much to the content. It’s not that other locations weren’t pivotal to the show, but they didn’t necessarily change people’s perceptions about an area. NJ went from being a punchline to a headliner with one simple trip down the Turnpike.  “Hawaii-Five-0” didn’t have that sort of heavy lifting.

In today’s TV landscape, Chicago has risen to prominence, owning NBC’s Wednesday slate. But in today’s climate, the content presented is far more politically raw than simply “Lifestyles of the Rich and Gangster” romanticism of The Sopranos. What stands apart is how the setting matters. Chicago isn’t a stand-in for Anytown, USA. CBS has an upcoming limited series called “The Red Line”, a title drawn from the elevated train line that runs the gamut of Chicago’s demographics and socioeconomic standings. The city’s uniqueness lets audiences develop a broader understanding of what Chicago’s really about – similarly to showing New Jersey as more than just a Turnpike that ends in Manhattan. Chicago is today’s “IT” town.

A Google search of “Where are TV shows set?” generated 3.1 billion results. People are interested in the places that they see on television. So interested, it can also create a boon for local tourism - yes, you can take a Sopranos’ tour if you’re so inclined.

The Ultra 4K screen presents a well-defined opportunity for a motivated marketplace looking to reinvigorate its local reputation. 

For a point of reference, read the USA Today article ‘The Sopranos,’ Launched 20 Years Ago, Made TV Hip and New Jersey Cool

  

  4   Despite Volatility in the Music Industry, Radio Endures 

Depending upon your perspective, radio can either be a source of stability or of discovery. Ultimately, It’s a mass medium that behaves like a personal medium – there’s a sense of one-to-one-ness about radio that doesn’t come through in other media. That conversation-ality makes it twice as trustworthy to listeners than even social media (which has a very polarizing relationship with trust and the truth overall – think close, trusted Facebook friends vs Wikipedia and Twitter trolls). There’s a voyeuristic characteristic of social media and being witness to the circus that it brings that doesn’t come with traditional broadcast radio.

Put simply, people connect with the personalities they find on the radio – 80% perceive shared values with the people they routinely listen to on the radio. That’s part of the choice of listenership; other, more relatable stations are available elsewhere.

Now that streaming digital music has fundamentally changed the industry, record companies market its artists for a different outcome now. The end goal is in creating an entertainment franchise rather than moving albums - and radio personalities still play an important role as curators of great music!

Read the Inside Radio article Report: Amid Reinvented Record Biz, Radio Remains Integral  

 

  5   The Super Bowl is Our National Cultural Celebration - with Local Impact

The Super Bowl - the biggest televised event bar none – has come and gone this year and kicked up its usual social news storm. For the better part of two weeks we’re on high alert for anything and everything game-related, lingering after the game as we dissect the ads, viewership, listenership and whether or not this is finally the point where we discover the portrait of Tom Brady that’s aging in his attic. Overall, it’s the greatest combination of unscripted (game) and scripted (advertising) content we can dream about, delivering 100+ million consumers watching simultaneously in a huge, national party.

The game ended up underachieving slightly, if delivering a combined audience of over 100 million viewers can be described that way. For the first time, CBS is reporting that it amassed 100.7 million viewers across its network, digital sources, and mobile viewing. However, that still represents a decline that makes it the least-viewed Super Bowl in ten years. The network’s pure linear audience was 98.2 million. This was the first time that the television audience fell below 100 million since the Steelers beat the Cardinals in 2009 (and NBC delivered 98.7 million viewers.)

When the Rams moved back to Los Angeles from St. Louis, it meant that what they were gaining in TV households (going from the #21 TV market to #2, picking up over 4.1 million TV homes in comparison), they were likely giving away in football fever. LA’s 44.6 local HH rating was the highest Super Bowl rating there since 1996.

There are many factors being cited that may be behind the result – a lackluster game, “Patriot fatigue”, ongoing protest controversies, an underwhelming halftime show, among other things. Nearly everything was mentioned as contributing to the result other than counter-programming, a rare instance in the current landscape that fragmentation had little impact on a program.

But it bears mentioning that there was an unexpected vulnerability– a sort of local market Achilles' heel, at least for this one game. Fans in New Orleans felt their trip to the Super Bowl was hijacked by a missed call by the officials. The governor of Louisiana even tweeted a suggestion to binge watch episodes of “NCIS: New Orleans” during the game, in an interesting support of alternative CBS content, apparently. In pure New Orleans style, they threw a party instead. A big one.

As a result, the 26.2 local New Orleans rating was far below last year’s 53 rating. For a market that routinely delivered local ratings above 50 for a regular season Saints game, this football-friendly market made its feelings about this particular game known in no uncertain terms.

Despite these issues, the Super Bowl is still the most incomparable media event of the year. The myriad of factors that chipped away at viewer interest were likely symptomatic of this game alone. While there could be other unknowable characteristics coloring the broadcasts to come, the undeniable truth is that the Super Bowl is the only media event that has the scale and the social impact that holds our collective interest to this degree. Super Bowl advertising is part of the national discussion, nearly on par with the content. Other than this anomaly, Super Bowl deliveries tend to show a year-over-year increase and dominate the list of top broadcasts of all time.

The Super Bowl will weather this storm. It’s still our national holiday. The party in New Orleans might’ve been a funeral for a game, but not for the institution.

 For more coverage on the Super Bowl, you can start here. But realistically, it’s not as if the stories aren’t everywhere. Super Bowl LIII Drew Lowest Ratings in 11 Years – Or Did It?

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