Cable TV as Going Obsolete - Assignment Example

? Cable TV as Going Obsolete First and of Cable television has been around for more thanhalf a century. Whole generations have grown up in front of the box with the moving pictures. According to Nielsen, on average, global viewers spend at least 4 hours a day watching TV. The content changes depending on the location, the time, and the network, but always with a target audience in mind. In the US, the standard target demographic would be men and women between the ages 18 to 49 years old which would account for more than 112,806,642 people or 36.5% of the total American population (Howden & Meyer, 2011, p. 2). The range is more of a generalization rather than a fact since different shows and different networks cater to different people. Taking those into account, television has a possible target demographic ranging from toddlers to octogenarians with little regard for race, level of education or occupation. Over the years, technology has advanced to the point wherein information is accessible through more than one channel. Of late, the internet has become the same kind of competitor to television as television once was to radio. In their 2012 Accenture Consumer Electronics Products and Services Usage Report, Accenture (2012) found out that “the percentage of consumers watching broadcast or cable TV shows, movies or videos on TV, in a typical week, plummeted from 71 percent in 2009 to 48 percent in 2011” (p. 8). There are many reasons why people are shifting from television’s scheduled programming to internet. One of the more common reasons is convenience. In a high-speed world, people find less and less time at home to watch the shows they want to watch on TV. Another recent survey by Nielsen (2012) showed that users of Netflix, an on-demand streaming media provider, have chosen to watch more TV programs on it than ever before totaling 19% of their subscribers which makes an 8% increase from the previous year. Subscribers can watch and rewatch their favorite shows whenever they want with services like these. Another factor that makes online viewing more appealing is the mobility. In a study conducted by Blip.tv (2011), one of the Internet's largest independently owned and operated video properties, people have been spending 9% less time watching television, 26% more time watching web series on the PC, while spending 19% more time watching video content on a mobile device. With the wide range of tablet PCs and smartphones in the market today, people will have little reason to stay at home and watch TV when they can view their favorite videos online wherever they go. On a related note, age and society can also be factors. In the Hollywood Reporter, Georg Szalai (2011) wrote about how baby boomers (47-65 year old citizens) spend more time watching TV than the average person, averaging 5-6 hours a day compared to the 4 hours and 49 minutes of people within the 18-49 year old demographic. Many television networks are making changes to appeal to these people by revamping old shows and featuring familiar faces on their networks. This could be brought about by the older audience’s unfamiliarity with the newer technology. Conversely, the younger crowd is opting for more internet-based or “cloud services.” Accenture (2012) found that “Thirty-eight percent of younger consumers have stopped or almost stopped renting or buying DVDs, and 16 percent said they had terminated or were considering terminating TV subscription services” (p. 9). Economically speaking, the increase in the number of consumers willing to terminate their TV subscriptions is a practical one. Why would people continue to pay for services they would use for only 3-4 hours a day when they can get the same service anytime they want, anywhere they want along with their internet subscription? All these shifts toward cloud services are dependent on the availability of the hardware and the reliability of an internet connection. Computers are getting smaller, more sophisticated and easier to procure; broadband internet is getting faster and more widespread, but it does not reach to every part of the world. People who cannot afford the gadgets or cannot connect to the internet still rely on television to give them a picture of what is going on in the world. As of now, the television still has a large user base, but barring radical innovations, that will diminish continuously in the near future. As older generations move on and the younger generations acquire faster and more mobile internet-capable devices, Cable television will soon go the way of the dinosaur. Before that becomes a reality, marketers need to come up with ways to keep cable TV alive in the face of technological advances in the internet. One of the ways was mentioned above. By changing the focus of television to appeal to the audience that watches TV the most, they are slowing down the losses of TV subscriptions. This gives their most avid customers reasons to remain as avid, if not more than before. As mentioned before, the standard demographic of 18-49 years old can only be a guideline whereas for a Cable TV company to be successful, it has to supply what their viewers want. Another method of increasing TV viewership is to produce content that would not be found online. This may be difficult in that it is relatively easy to place videos shown on television online, but not everything can be shown online. Producing new entertainment content has always been a part of the television industry, making more would certainly take a little more effort to keep TV interesting. Another method that could help TV maintain its foothold as a form of entertainment for the masses is increasing its availability to places where Internet is hard to come by. The fast pace of change in technology has made it difficult for some places to catch up. Places of lower income or remote location have difficulty in keeping up with the cloud services, and with new models of gadgets popping up every few months, most people in these places can hardly afford to keep up as well. Television is a less costly alternative for those who do not have access to the internet. Marketing it there would help increase the number of TV viewers. In relation to the last suggestion, many countries, both developing and not, have trouble providing internet to the whole population. According to the CIA World Factbook (2012), the United States of America has the most number of internet service providers, allowing them to have better access to cloud services. They have an estimated 498 million hosts, giving them nearly unparalleled access to the internet. Internet is so widespread in the US that the country with the second most number of internet hosts (Japan) only has 63 million hosts. Many countries have far less in the way of internet connection. A lot of these countries could benefit from using Cable Television as a means to distribute information and entertainment. One of the best countries to develop cable TV is Russia. Russia falls in the 10th place of the country with the most internet hosts with only 13,758,000 Internet hosts compared to the USA’s nearly half billion. Though Russia has more internet hosts than other countries, this is mitigated by the country’s size. Russia is ranked number one in the CIA World Factbook as the country with the largest area covering 17,098,242 sq. km. (almost twice as large as the USA). For a country this large, internet service would not be able to reach to all places. Developing and marketing Cable TV in Russia would not be difficult since it already has 6 national TV stations. It could also be profitable in that Russia has the privilege of being the country with the 7th highest GDP at an estimated 2,414,000,000,000 as of the year 2011 (CIA, 2012). According to Accenture (2012), Russians spent 3.6% of their annual income on electronics in the past 12 months. This would be twice what Americans have spent in the same time frame for electronics. Bringing or innovating Cable TV to Russia has to be planned in advance. Extensive studies have to be made to determine how best to introduce a cable TV company to a new place. According to the CIA World Factbook (2012), Russia has a large population, the majority of which falls under the 15-64 age bracket (71.8%) with a median age of 38.7 years old; most of the population is female (0.91 males/female); they have a high literacy of 99.4%; unemployment is quite low at 18.3%; and the labor force by occupation consists of agriculture-9.8%, industry-27.5%, and services-62.7%. From these demographics, it could be determined that most of the viewers will be middle-aged, educated, and mostly employed in services, with slightly more female than male. From this, and other factors, the cable TV provider will be able to segment the services to fit the subscribers’ preferences. An example for a simple segmentation based on the demographics alone would look like this: 35% - Younger families, educated, affluent, employed, most likely with kids - 50% ad supported cable, 10% pay cable, and 40% broadcast 25% - More female, employed, generally more affluent, educated, with kids - 40% ad supported cable, 20% pay cable, 40% broadcast 25% - Families with few or no children, lower income (blue collar) - 65% ad supported cable, 5% pay cable, and 30% broadcast 15% - Average age with lower education and income - 20% ad supported cable, 80% broadcast This would be a very rough estimate as to the segmentation of the cable TV company since more information is needed such as the technology available at home and the general preferences of the viewers, but it gives a sketch of how services could be provided to families in different demographic spectrums. Segmenting is not enough to bring Cable TV to a new area; it also needs to be presented to the viewers in a way that will make them interested to subscribe to cable TV. Since cable TV will be watched by the whole family, it can be positioned as a reason to get together, or catering entertainment for the whole family like: “TV has never been more family friendly!”, it can also focus on the variety of shows being shown: “Entertainment for all!”, another way to position it would be the amount of quality entertainment it can provide: “Quality TV all day, and all night!”, it can even be presented as a cheaper alternative to other cable providers: “Quality TV for less!”. Positioning the product requires extensive research. It takes a lot of study to show people what makes you different from the competition, and it takes effort to prove to them that what makes you different is worth their money. References Accenture (2012). The 2012 Accenture consumer electronics products and services usage report. Retrieved from http://www.accenture.com/SiteCollectionDocuments/PDF/ Accenture_EHT_Research_2012_Consumer_Technology_Report.pdf Blip.tv (2011). Blip.tv releases results of dynamic logic study revealing how, when & where people consume web series. PR Newswire. Retrieved from http://www.prnewswire.com/news-releases/bliptv-releases-results-of-dynamic-logic-study-revealing-how-when--where-people--consume-web-series-131445523.html Central Intelligence Agency (2012). The world factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/index.html Howden, L. M., & Meyer, J. A. (2011). Age and Sex Composition: 2010. Retrieved from http://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf Nielsen (2012). Survey: Netflix users streaming more TV. Retrieved from http://blog.nielsen.com/nielsenwire/online_mobile/survey-netflix-users-streaming-more- tv/ Szalai, G. (2011). TV networks target aging baby boomers with shows, talent. The Hollywood Reporter. Retrieved from http://www.hollywoodreporter.com/news/tv-networks-target-aging-baby-165961 Read More