The Future Of Cable TV: How The iPhone Killed Television
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Future Of Cable TV: How iPhone Streaming Capabilities Are Killing Television
The (R)evolution Of The Smartphone
In 1983, when Motorola debuted the world’s first production mobile phone—the DynaTAC 8000X—it’s hard to imagine anyone grasping the future that lie ahead. Never mind fitness trackers and podcasts — two things that weren’t even in peoples’ vocabulary at the time — the mere concept of a phone being used for anything but talking would have seemed alien….even silly. It certainly didn't seem that the future of cable TV would be irreversibly impacted by the rise of mobile phones.
Since the debut of the mobile phone, technology has evolved at a staggering pace. There have been incredible innovations, including improvements to range and reception, battery life and processor speeds, as well as advancements in broadband, WiFi, apps, and accelerometers. These technological leaps have helped to make the smartphone an essential part of our everyday lives.
How The iPhone's Rise In Sophistication Impacted The Future of Cable TV
From Communications Device to Entertainment Central
Mobile phones are a ubiquitous and ingrained part of modern society. In the U.S., phone users spend an average of five hours per day on their devices. Besides standard email and texting, advancements in streaming have allowed for more time on social media platforms like Instagram and Snapchat, as well as social messaging services like WhatsApp and dating apps like Tinder. This increased bandwidth, combined with high definition video players, has also led to more time spent playing mobile games and watching online video on platforms such as YouTube and Netflix.
As has been predicted for years, video-watching on smartphones is beginning to overtake traditional television. According to Nielsen’s Total Audience Report from last year, video consumption on smartphones exceeded that of linear TV in the 18-24 demographic. The continued growth of mobile paired with television’s declining numbers indicates that these numbers will diverge further toward streaming’s favor.
How the iPhone Created a New Avenue for Content Delivery and Transformed Consumption Habits
iPhones are everywhere. Growing from a respectable 1.39 million units in 2007, Apple has sold more than 1.3 billion units to date there are no signs of sales slowing down. In fact, the iPhone X — one of the most expensive devices in Apple’s line — outsold other units with an impressive 16 million units sold in Q1 of 2018.
One of the keys to Apple’s success was creating a handheld entertainment device that opened up their platform to apps capable of driving much of the engagement. Like other top-of-the-line phones of the day, the iPhone could handle phone calls, emails, text messages, and internet browsing. What separated the iPhone from competitors was its focus on media. Offering a camera, music player, large screen, and third-party apps, Apple’s device wasn’t just an all-in-one communications device — it was an all-in-one entertainment device.
Social Media’s Mobile Push
The iPhone has come a long way since debuting its 3.5 inch, 320 x 480 pixel resolution screen in 2007. Today, a larger display with faster processors and higher HD resolution screens have helped to make the iPhone the go-to entertainment device for many. Contributing to this growing trend has also been the innovative apps and features designed by mobile first social platforms.
Instagram: King of Mobile Image and Video Networks
Feed—While Facebook can be credited with introducing us all to the modern day news feed, Instagram memorialized the format as the preferred way to view and engage on mobile devices. Instagram’s smooth, minimalist design allows users to view, like, and comment with speed and ease, making it ideal for either quick check-ins or deep dives.
Stories—Lifted from Snapchat, Stories has been a massive success for Instagram, helping to establish it as the premiere social platform on mobile. As of June 2018, Instagram Stories has 400 million daily active users (DAU) — more than twice Snapchat’s entire DAU.
IGTV—In a bid to do repeat the content dominance they demonstrated with Stories, Instagram is launching a new, longform service called IGTV. Aimed straight at YouTube’s viewers and creators, IGTV will allow vertical videos up to one-hour in length.
Snapchat: Disrupting the Social Media Game
Stories—The originator of time-sensitive, disappearing media, the Stories feature helped Snapchat to become a top social platform. Now available on a multitude of other networks (marketed under various names), Stories-like features have been huge growth-accelerators for social apps and mobile as a whole.
Discover—A feature that allowed users to follow and engage with “Publishers,” Snapchat Discover was a game-changer for media companies and brands looking to connect organically with consumers.
Pictures as Messages—Captioned photos and GIFs have existed on the internet for some time, but Snapchat was the first platform to make in-pic messaging a simple and fundamental part of peoples’ social experience.
Smartphones may have given people the power to text, but social media apps have made person-to-person and group messaging something to be experienced. WhatsApp, Facebook Messenger, Instagram and Snapchat all have their unique takes on direct messaging, allowing various forms of media, including images, video, GIFs, emojis, and stickers, to be traded and consumed.
Television Content Available To Stream On Smartphones
Content is central to the success of a platform, and different networks have taken different approaches to capturing the largest audiences. While Instagram and Snapchat are often the two most talked about social mobile apps, other media companies are blazing their own trail in the mobile space.
YouTube Premium—YouTube has cornered the market in allowing users to stream the internet on their mobile device. Now with YouTube Premium (formerly YouTube Red), Google’s streaming giant looks to take a chunk out of cable by offering paid TV channels alongside their own original content.
Hulu—Hulu has been offering syndicated television programming for years. Now coming into its own as a content creator, Hulu recently started offering a Live TV package with basic cable and news networks, as well as the ability to bundle premium channels, such as HBO, Cinemax, and Showtime.
Prime Video—Amazon’s Prime Video combines original content with select streaming channels, and add-ons like HBO, Starz, and CBS All Access.
Netflix—As the streaming platform everyone is trying to catch up with, Netflix isn’t bundling their programs with other channels competing for the same eyeballs. Instead, with an unprecedented 112 Emmy nominations this year, Netflix is no longer just a top streaming provider, but a top media creator.
Facebook—Last year, the world’s largest social network got into the premium content game with Watch. Many have complained that the service has underperformed, but 40% of Facebook users report watching the longform content once a week.
Cable Entertainment, News, and Sports Apps—Seeing the trend toward streaming, many traditional media companies have launched their own mobile apps. Different rates and varying ways to access exist, with popular channels such as ESPN, HBO, and CBS all looking to crack the mobile code.
Cord-Cutting And The Decline Of Cable TV
Cord-cutters and “cord-nevers” are a growing problem for the paid cable industry. The decline in cable subscribers has averaged 2.4% per year since 2013, jumping to a 3.4% decline in 2017.
Almost 75% of cord-nevers cite affordability as the primary barrier to entry. It’s a growing sentiment among U.S. cable subscribers as well, with 10% saying they’re considering canceling their service within the next year. The future of cable TV depends on having a solid base of subscribers; this has huge implications as Gen Z grows up. Members of Gen Z have grown up with smartphones in their hands and access to streaming content, so they are unlikely to take to cable TV.
Time Spent On Smartphones Is Overtaking Traditional TV Watching
For U.S. audiences, traditional cable TV watch time is down and mobile screen time up. Looking ahead to 2019, smartphone viewing is predicted to overtake that of television as it reaches an average of 3 hours and 43 minutes per day.
This changing of the guard is set to take place in China within the year. Viewers are also expected to increase their video watching by 26% per year, and are projected to spend one-third of their time streaming video by the year 2020.
In 2014, the UK was already preparing for a shift from television to mobile. As of 2016, social media became the go-to news source for Britons aged 18-24, while 17% of surveyed UK mobile users reported streaming Netflix on their device in 2018. According to a recent report by Ofcom, streaming video has now usurped traditional TV in the country.
How The Future Of Cable TV Impacts Marketers
Along with ratings, television ad sales are in decline. While many marketers have turned to digital media to reach their target audience, others have gone even further and adopted a mobile-first strategy.
With approximately 14.5 million sponsored posts and more than $1 billion being spent on influencer marketing, companies have been investing heavily in Instagram campaigns. The explosive growth of the platform, as well as pushes by Snapchat, YouTube, and Facebook, are giving both small and large brands new opportunities to connect and engage with audiences on mobile. As more and more people cut cords, additional ad dollars are expected to shift, contributing to influencer marketing’s projected global ad spend of $5-10 billion by the year 2020.
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July 21, 2018 By Mediakix Team