SplatF | Business Insider | Fortune
Television’s business model may be collapsing, writes Dan Frommer, if you consider some adjustments that may happen in a decade a “collapse.” That’s how Business Insider honcho and student of human behavior Henry Blodget read the TV tea leaves on Sunday in a post titled “Don’t Mean To Be Alarmist, But The TV Business May Be Starting To Collapse.” After the double hedge in the title (“May Be Starting To”?), Blodget lays out his case for how television may be following newspapers down the road of despair:
- At Blodget’s house, television is rarely consumed at the time or on the network shows are broadcast, ads are skipped, news is consumed on the Internet, and no single screen is dominant.
- Advertising money is thus wasted on the Blodgets and the millions of people he presumes are like him, and the cable fees the Blodgets pay are mostly wasted on stuff they don’t watch.
- Cable ratings are down (CNN’s ratings are really, really down, and Jack Shafer recently wrote that “the audience for cable news has peaked.”)
Blodget then predicts networks will slowly collapse, consumers’ pay TV costs will drop and somehow TV will be rebundled in ways that better serve consumers.
Frommer says an evolution is not a collapse (bolded text in original):
The reality is that, yes, the TV industry will change over time. Some of today’s winners will become tomorrow’s losers, and new entrants may grow to dominate. But barring some unforeseen technical or creative revolution, it’s going to happen a lot slower than you think.
Disney, Frommer notes, signed a 10-year deal with Comcast, and many networks are finding ways to throw fences around their content online: those Olympic streams from NBC will be available to cable and satellite subscribers only, he writes. And the broadband pipes through which many of the Blodgets’ preferred entertainments flow are often owned by cable companies.
Blodget has updated his post to say he thinks broadband prices will drop once wireless transmission makes competition more probable in that space. In Fortune, Philip Elmer-DeWitt says Apple won’t save TV unless it builds such a beast.
Unless the company plans to build a nationwide wireless network, Apple’s version of television is going to be as dependent as we are today on the local monopolies that have wired our homes for broadband. And until the networks have been brought to their knees and are ready [to] deal, their programming is going to be riddled with ads.
Meanwhile, the TV business, as Blodget correctly predicted, seems to remain oblivious to his thesis: NBC owned-and-operated stations announced a competition to grant $1.2 million to nonprofits in their markets, Anthony Bourdain signed a sweet deal with CNN, and NBC correspondent Chelsea Clinton recently returned to Joplin, Mo.
Correction: An earlier version of this post stated that Philip Elmer-DeWitt writes for Forbes; he writes for Fortune.
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