Is the Real TV Killer Hidden in Plain Sight?

The impending death of TV due to cord cutters is a story that's long been told. 2013, 2014, 2015, and even this year, pundits have been proclaiming that the cord cutter movement is well on its way to putting an end to TV. Then the UpFronts and NewFronts happened in 2016 and the renaissance of TV posts came flying from countless purists.

The reality is that people are not cutting cords, they are shaving cords; but not at the rate that everyone feels. The losses in TV subscribers due to cord cutting is less than a rounding error for the big Telcos.

Even with Digital Video spending increasing tremendously each year, advertising spending allocated to TV is not going anywhere; actually it is also increasing. A 'dead' platform with increasing allocation of spend? Hardly.

What most feel will kill TV

While most traditional TV providers such as Comcast, Time Warner, DirecTV, Dish, etc. are worried about Netflix and Amazon Prime causing the end of cable television watching as we know it; the real disruption vehicle to television remains hidden in plain sight.

Facebook, Twitter, Twitch, Snapchat, and highly trafficked social media platforms similar to them (and even those still to come) are the ones who are going to disrupt the television industry and do something that all of the other 'TV killers' before it have not been able to do, change consumer behavior, at scale. Let me explain... but first.

TVs and Dishwashers

Now let me clear something up right away that you are surely asking. TVs aren't going anywhere, how they receive their content, is. Chromecast, Apple TV, and other devices allow you to take content from your smaller screen and 'throw' them up to your TV, thus making your TV less of a content delivery vehicle and more of an appliance. A medium for which you use, solely for its format. Additionally, while many consumers are viewing digital video content on smaller screens, the lion share of video content viewing still happens on what we know of as a TV set. But in there lies the disruption point for Telcos.

If your TV is nothing more than an appliance that displays the content brought to it by another connected device, then is it just a monitor? What happens if the device that connects content to our viewing appliance comes from multiple sources? It is already happening today with Smart TVs and the 'traditional' streaming services such as Netflix, Hulu, Amazon Prime and the like. Why can't it come from more traditional websites instead of 'apps?'

The disruption of TV will not come in the form of direct appliance and format disruption, as it will come in the form of content delivery.

According to GfK's recent study, 49% of the sampled American population has a subscription to at least one Over-the-Top service, such as Netflix, Amazon Prime, Hulu, etc. 17% has subscriptions to 2 services and some even subscribe to 3 or more. This new consumer phenomena is dubbed the 'self-bundlers' and while it shows an age of discerning consumer, it doesn't allow scalability. The average income for 'self-bundlers' comes in at about $90k a year, quite a bit more than the average American household. Again, self-bundlers will not provide a big enough disruption for TV and is nothing more than another rounding error. Interestingly enough, the largest over-the-top provider Netflix, just has over 80 million subscribers, compared to roughly 100 million pay-tv subscribers, according to Business Insider. In order to combat this, companies like DirecTV are launching a 'skinny bundle' which includes limited channels delivered multi-device.

Disruption, hidden in plain site

All this chatter about skinny bundles, cord shavers, cord cutters, time shifting and over-the-top solutions make up such a small percentage of disruption to the TV giant, but receives all of the press. The unfortunate nature is that everyone is missing the biggest potential disruption, hidden in plain site... Social media networks as the content delivery method.

We can all agree that internet connectivity has never been easier to obtain and with easily accessible internet-enabled television appliances, internet connected devices a plenty, and connectivity dongles such as Chromecast, Apple TV, and Amazon Fire Stick, and you have a recipe for "if there is internet, there is TV."

At this year's Republican and Democratic National Conversions, something very interesting happened... News outlet CNN was live streaming the whole event; not on their traditional network, but on Facebook Live. While this seemed like just a smart usage of social media and another way to sell ads, it fundamentally poses a significant threat to TV and with an audience of 1.7 BILLION on Facebook, does the piddly 55-100 million cable TV subscribers who could watch your traditional channel even matter?

I like butter and precedents

When the Southern cooking maven Paula Dean was removed from her position on the Food Network in 2014, she started her own channel, available completely online. This business soon after showcased strong growth and with someone like Glen Beck's BlazeTV earning 300k subscribers (in 2014) and the WWE channel boasting close to 1 million, there is demand for online content, and those willing to pay. Not to mention the juggernauts already mentions in Netflix, Hulu, and Amazon Prime.

The Live Sports Tipping Point

Live sports is one of the few sacred places left in TV, since you can't easily timeshift a live sporting event AND be online at the same time. All it took was someone like the NFL or NCAA College Football to start opening their walled gardens to allow streaming, such as what is happening today with Twitter's Thursday Night Football and you bring streaming on social, to the mass. This social streaming allows users who do not necessarily own a pay-TV service to watch one of the most restricted events, the NFL, for free (ad supported). Add in the partnership deals between Twitter and College Football finalizing and you add yet another seminal event that was once strangle-held by 'traditional' Telco delivery networks, to be distributed to the masses, on a free channel, with connectivity as the only barrier to entry.

Election 2016: The Happening?

While the streaming of NFL games on a 'free' ad supported social network seems like a huge jumping off point, ratings for those games have been less than ideal, yet consistent with rating declines felt by the NFL in general, perhaps the 2016 election in early November will be the 'event' that brings 'streaming social' content delivery to the masses. Their live streaming of the Presidential Debates, has been a tremendous viewing success, outpacing that of the NFL game streams.

On election night, millions of Americans flock to their TVs to see who is going to be the next president of the United States; an event made for TV. However, BuzzFeed announced that they are going to live stream their election night coverage on Twitter; free to users, but ad-supported. Users will follow.

The Social Networks are Hustling

Twitter has its partnerships with the sporting associations and news outlets to live stream events for free on Twitter (ad-supported), and now Facebook is allowing users to 'throw' Facebook Videos up on their TV (appliance) using their Chromecast or Apple TV. Soon it will be Facebook Live streams 'thrown' onto TV (appliances) and voila... you have a TV delivery network, without Telco interaction.

Social networks such as Facebook and Twitter have the audience and a growing share of our time everyday. Publishers are having an increasingly more difficult time creating content that receives strong ratings and generates a profit. If a producer or publisher of digital video content took their show and brought it live to Facebook and Twitter as an original program (similar to what Netflix, Amazon, etc. have done with their own original programming), could we be seeing the rise of a new 'cable' network? One with well over a billion people worldwide and over 200 billion within the United States who care more about revenue per user, than they do about charging for the content. There, we will have disruption brought to Telcos by organizations who have substantially deeper pockets, and a dead set mission of providing a vertically integrated solution to consumers. Telcos... I'd be cautious and holding onto my internet connectivity deals because in a world with freely distributed content to TV appliances, whoever owns the pipes, owns the content.