It’s no secret cable has been struggling since cable alternatives have become mainstream, but the cable vs. streaming debate had really been one where there was plenty of room for both cable and streaming services.
In 2017, though, cutting the cable cord may mean a lot more than it did just a year ago. Cable companies are choosing their sides, and the world of cable television may soon end up being something completely different.
Dwindling and Fragmented Markets Continue
That still leaves 98 million homes that get pay TV, but this dwindling number is also causing channels to suffer – which will ultimately lead to a further and more rapid decline in subscribers. Even the NFL, a massive draw for cable subscribers, has experienced noticeable viewer loss due to the contraction of the cable market.
However, some specialty media companies like Scripps Networks, owner of Food Network, HGTV and the Travel Channel, aren’t ready to throw in the towel yet. They believe in the power of niche markets that are still emerging and maintain that the power of a good story will keep people coming back for more. Shari Redstone, whose family owns CBS and Viacom, has recently made the decision to keep these two entities separate for much the same reason. With the market so fragmented, these small networks still stand a chance.
“Everything is not going to be a Comcast-NBC brand or AT&T-Time Warner brand,” said Ken Lowe, in defense of small networks. “There’s going to be some interesting vibrant brands that will still hang in there.”
… And Then There are the Big Guys
On the heels of a merger between AT&T and DirecTV, another combination looms.
AT&T is looking to scoop up Time Warner for a hefty $85.4 billion price tag. Although there are a number of procedural hoops left to jump through, the confidence in this new AT&T deal is high. It’s more than just a merger of media companies, though. This particular combination stands to create something that has never been seen before, and that marketers should be watching with a great and eager eye.
When AT&T and DirecTV married, there was speculation about ways marketing could be changed forever, but nothing really happened. This time, however, it’s AT&T that’s talking about groundbreaking ad vehicles.
In a press release posted shortly after the first rumblings of the acquisition began, AT&T CEO Randall Stephenson was quoted saying, “Our TV, mobile and broadband distribution and direct customer relationships provide unique insights from which we can offer addressable advertising and better tailor content. It’s an integrated approach and we believe it’s the model that wins over time.”
In plain English, that spells opportunities on the horizon. AT&T’s massive network of mobile subscribers are a virtually endless data mine waiting to be applied to personalized marketing. DirecTV brings cable box technology to the mix and, of course, Time Warner has all the content. These three tools could be easily put together to create a new sort of cable service that’s never been seen before.
A Whole New World
The marriage of data, content and hardware means programmatic marketing could become an entirely differently world.
Where the Internet is strong for pinpointing the exact customer for a product because of data sharing, cable is so undeniably weak. Putting the data to the cable content for the first time will give television marketers a more efficient and effective way to find their customers, no matter where they are. Even mobile users of the AT&T network could be reached directly in this same way, removing a giant barrier to accessing those sought-after Millennials who primarily consume content on their phones.
Cable cord-cutting isn’t slowing down any time soon, but there is a massive opportunity this year for cable companies to reach their ever-mobile audiences by making smart deals with either distributors like AT&T-Time Warner or through their own similar mergers. These demographics are still consuming plenty of programming – including the ads embedded in it – they’re just a harder target to hit with existing technology.
The merger of AT&T and Time Warner came at the perfect time, since it’s likely that some unique combinations are going to be necessary for cable companies to continue to survive.