Traditional media broadcasters need help to adjust to lower advertising revenue and viewership—following a year of uncertainty and volatility for the entertainment industry.
Key Details
- The entire media landscape faced a slump in 2022 as poor streaming returns caused investors to devalue the market.
- Television stands in a vulnerable position though, as advertisers begin to look away from cable and broadcasting, as subscriptions decrease over time and the market share shifts towards streaming media.
- Media giants are left trying to find a way to transition content towards streaming apps while managing traditional television content as they decline, which has proven difficult over the past year as investors similarly shy away from unwieldy streaming services.
Why it’s Important
Entertainment media has undergone a radical transformation over the past decade as television has given way to the rise of Netflix, YouTube, and internet streaming apps. The landscape once again seems to be at a standstill as it awaits for streaming services to make further incursion. Still, the last year of investor anxiety points to a market waiting for volatility to settle.
The state of television reflects the state of the entire media landscape. We recently reported that the Dow Jones Media Index saw a significant devaluation of more than $500 billion in the past year as consumers became less dependent on streaming media.
“The industry has been buffeted by a financially disastrous transition to streaming that has ‘wreaked havoc’ on the business models of major media firms. Many of the challenges that are hobbling the business today stem from the incorrect hypothesis that streaming would deliver a bounty of riches to comfortably offset spiraling cable TV losses,” says LinkedIn News.
Television is in a uniquely vulnerable position compared to new media as cable viewership and subscriptions consistently decline over time. Nielsen reports streaming usage is up 41% as the market share for broadcast television and cable shrinks over time. Axios calls 2022 one of the “hardest years ever for traditional television companies” and the start of a trend it only expects to get worse.
85% of homes in 2007 paid for TV subscriptions. 79% did in 2017. Cable subscriptions are being cut faster than ever as viewership decreases.