While watching video on a screen remains popular, television is increasingly becoming the domain of older viewers. Among the major U.S. television networks, the most popular show, the rebooted Roseanne, has a viewership whose average age is nearly 53, according to the New York Times. Even the show with the youngest average demographic, Riverdale, has a viewership average age of 37.
Television Ad Dollars Are Down…
Younger viewers, by contrast, stream and browse sites like Netflix and YouTube.
Why does the age matter? Because television is underwritten by advertising dollars. And advertisers have traditionally courted younger viewers. Younger people are likely in the process of establishing their brand loyalties, goes advertising thinking, as well as in the market for cars, homes, and more trendy purchases to boot.
In 2016, advertising sales hit $43 billion. But they dropped more than 2% in 2017, and are projected to drop over 2% again this year. More alarmingly, perhaps, the long-term forecast is also for 2% attrition each year for as far out as 2022.
That trend may be further exacerbated by another technology news trend: falling television viewership. U.S. viewers watch 6% less traditional television than they did in 2015, a drop of 18 minutes every day. Cable companies are watching subscriber numbers fall.
…While SVOD Viewing Is Up
Ironically, the drop in TV advertising sales is occurring in what many observers consider a golden age of video content. More media is being watched than ever before; it’s just that television networks are no longer the dominant place where that occurs.
More than 50% of households in the U.S. now subscribe to streaming video on demand (SVOD) services like Netflix, Hulu, or Amazon, according to Business Insider. Many SVOD services, like Netflix and Hulu, have invested heavily in original programming, which is increasingly popular.
As a result, “television” is increasingly becoming synonymous with streaming, even when it didn’t start out that way. Networks have apps that follow the streaming model, allowing viewers to watch shows when they want, on the devices they prefer. Networks are also moving increasingly to following the streaming model in developing content that can appeal to smaller market segments than having to exhibit broad appeal.
Advertising is increasingly following the streaming model as well. Advertisers have long been attracted to digital advertising, which allows them micro focus on their target markets. They can advertise on content that may appeal to first-time home buyers or fashion-forward consumers.
Companies with network television subsidiaries, such as NBCUniversal, Viacom, Turner, and Fox, are developing business strategies to standardize their language and data so that advertisers can buy advertising across their platforms, rather than focusing on a specific network.
Advertising for programmatic television is expected to climb 17%, to $10 billion, next year, compared with only $2.5 billion in 2015.
So ultimately, who’s the market? Increasingly, the viewer of streaming content.