The Real Reason TV Channels are Facing Extinction

For television, these are the best of times and the worst of times. For content creators, this is the golden era of television. In 2015, more than 400 scripted TV shows aired in the US – a 94% increase since 2009.

On the surface, you’d think traditional TV channels would be soaked in cash, thanks to large audiences and increased peak advertising times.

Monopoly of Content

Until recently, the 4 major US networks were the gatekeepers of quality content. Anyone worth talking about was broadcast on ABC, NBC, CBS and Fox. HBO and Turner Broadcasting ran reruns and everyone was happy within their niche.

The Sopranos was a disruptive event that forever changed television. The HBO hit series ran for 8 years and told audiences, “It’s not only the big four who can entertain you.”

The Current TV Landscape

HBO opened the door for Netflix and Amazon to create their own original content. Who’s next? Even the so-called minor networks such as FW, The CW and USA Network are creating massively viewed content and building loyal audiences.

Content may be king, but the four old networks aren’t sitting alone on the throne anymore. Content distribution is a crowded space and fierce battles for a larger audience and larger profits are the name of the game in 2017.

Why Digital Content is More Profitable

Traditional TV has a huge inherent disadvantage:

TV cannot capture leads and nothing is measurable.

Just as bad, TV can’t provide extra or “bonus” information such as text or photos connected to a movie or statistics for sports fans. Amazon Prime and Netflix can. Online content channels can provide more content and track your actions. You can’t compare today’s online tracking – whether via Google UTM or a high end SaaS platform – to how cable TV tracks your viewing habits. There isn’t much to track on cable TV.

Amazon and Netflix aren’t delivered via legacy cable lines. You may view the content on your Smart TV, but the content is delivered via internet directly or from your mobile device and a streamer such as Chromecast or Roku.

You can’t click on legacy TV ads. You can’t receive more information about a car or appliance. You can’t receive a coupon and print it out and you definitely can’t buy that amazing set of kitchen knives for $19.99 (“or your money back!”). You need to pick up the phone and dial a 1-800 number or type in a URL on your mobile device or laptop – which guarantees super low conversion rates.

The Last Chance of Legacy TV

In the 1990s, “interactive TV” was a hot buzz word. Media executives told investors that we were “months away” from interactive television content and advertising. It never happened.

Like the music industry, legacy TV channels haven’t been quick to make changes. They can no longer slow down progress.

In 2017, television has two choices – deliver leads in real-time to advertisers or face extinction. Television can no longer remain “analog” when Amazon and Netflix are capable of offering measurable traffic and leads to advertisers.

How will television deliver leads for the first time ever? What will the business model of the future be for broadcast?

Stay tuned!

About the Author
Kenny Sahr is a startup marketing executive. His first startup, founded in 1996, was featured in Time Magazine and on 60 Minutes. Kenny moved to Israel from Miami, Florida. In his spare time, he is an avid music collector and traveler.
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