As modern devices become more advanced, along with the streaming capabilities of the internet, broadcast television continues to diversify the way content is consumed. There has been an increasing demand for platforms other than your traditional television set, such as mobile devices, gaming consoles, tablets, and computers, and the traditional TV business model seems to be losing ground. These methods provide an enhanced user experience with the convenience of accessing on-demand content with subscription services like Netflix, Hulu, and Amazon, rather than having to record a cable or network program.
While consumers continue to evolve, there is a general consensus among viewers to have more control over their entertainment; to have the ability to watch what they want, when they want. Streaming online content has had a major impact on the viewing habits attracting roughly 75 million viewers per day. As viewers become more accustomed to paying a nominal fee for programs without commercials, the number of traditional TV viewers continues to decrease, specifically among younger viewers. Programing that cable broadcasters can still leverage to capture a greater audience is live news and sports, which are currently not available online.
So much emphasis has been placed on this evolving landscape that Nielsen finally announced that they plan to add mobile device viewing to TV ratings in the fall of 2014. Advancements in mobile technology have not only made it possible for viewers to view televised programs, but have created new opportunities within social media. In fact, 67% of TV viewers use smartphones, tablets or laptops to consume content while actively using social media according to recent report from Ericsson. Social TV has many audience engagement benefits through online communities where viewers share opinions or obtain more information about the program, which results in an increased number of viewers.
A new player in the race for program distribution has made a significant disruption in the marketplace by using a new form of technology. Aereo is a subscription based service that streams free broadcast TV live without an antenna or cable connection – all for roughly $8 a month. With millions of dime-sized antennas that capture freely available broadcast programs, Aereo transmits them to a customer’s smart device or computer. Although the concept sounds great for consumers, major TV networks including ABC, FOX, NBC and CBS are pursuing legal action against the company over grounds that they are stealing content and depriving them of revenue – Aereo doesn’t pay any retransmission fees.
According to Aereo’s Chief Executive Officer, Chet Kanojia, “Aereo is a technology provider, and, as such, since broadcasting started, companies have sold antennas, television, VCRs, all manner of equipment, and made money doing that, and it’s perfectly legitimate and permitted by law. And just because it’s a new way of doing things, I mean, there’s no — there’s no reason why technology should stand still to respect all business models.”
This technology, nonetheless, is believed to have some benefits for network broadcasters by increasing their audience size. Having more methods of providing content across multiple platforms, advertisers then have opportunities to create new business models. A transformation could be underway thanks to the capabilities of internet bandwidth combined with the the demand for on-demand viewing.