I recently had the pleasure of traveling to the Underscore Krakow office to train the team on how broadcast negotiating and buying works in the United States.
In preparation for the trip, I prepared training materials that included a buying worksheet with various television dayparts, Cost per Points, Gross Rating Points, differing commercial lengths, program unit rates and so on, hoping I’d have everything I needed for a successful week of trainings. On day one, as I expected, this very bright group of Millennials who are digitally savvy asked lots of great questions about negotiating techniques, how to build a television schedule to goal, and Nielsen measurement methodology. While answering their questions and going through the various skills and techniques I’ve developed throughout my career using Primetime television shows as examples, it became very apparent from the blank stares I was receiving that the team knew nothing about the current line-up of American Primetime programs. Given that I was in Poland that might not seem so surprising. However, what was surprising to me was that five or six of my Polish teammates out of a group of 14 didn’t own or watch television. According to what they told me, “any information they need to get, they get online.”
Although I’ve been reading in the trades for some time now about cord cutting, this takes it one step further! These are Millennials that can’t cut the cord, as they never had a cord to cut in the first place. According to comScore, 24 percent of TV viewers ages 18 to 34 don’t subscribe to a traditional pay TV service. Nearly 46 percent of those viewers never had cable to begin with, while the rest simply cut the cord. Overall, people in this age group were 77 percent more likely than average to be “cord-nevers,” and 67 percent more likely to be “cord-cutters.” Forrester research goes on to say that their online survey of 32,000 American adults found that of the 24 per cent who say they don’t pay for cable, only six per cent are cord-cutters, while 18 per cent are cord-nevers.
Forrester predicts that by 2025, 50 per cent of U.S. adults under age 32 won’t pay for traditional cable subscriptions.
Although this does seem to be a threat to the traditional television model I’m not sure we should count out the cable providers just yet. Given that cable companies are a primary provider of broadband service in the areas in which they operate, they have that as their trump card. In other words, if you want to cut your cord to save money, the cable companies will make up the revenue on streaming Netflix, Dish Network, or SlingTV. Another ace in the hole for cable providers is for them to charge usage fees like cell phone carriers such as Verizon and AT&T. The more television you watch, the more data you use, the more expensive your bill will be. In fact, according to Bloomberg, broadband margins are higher and the switch away from traditional cable shouldn’t hurt the cable companies at all. So, either way, the cable providers win.
Regardless of which platform proliferates, traditional TV or Cord Cutter/Nevers, you can be sure of one thing. I’ll continue to be watching all those old episodes of my favorite shows from my childhood such as I Dream of Jeannie, Lost in Space, Mash, Cheers, Happy Days and when in the right mood, believe it or not, Little House on the Prairie!