For the past eight days I have been running a fever. Along with the fever, comes a side of headache and sore throat. I feel miserable. (Although my Dad says that miserable is a personality trait, not a symptom). I have been stuck inside the four walls of my home to avoid infecting others. All of which is to say that I’ve been watching a lot more television than usual.
While watching the tube, I’ve noticed that Canada’s television broadcasters are in a great war with Canada’s satellite and cable companies. Duelling TV ads are all over the place. The broadcasters are fighting for “local television” while the cable companies are against a “TV Tax“.
Essentially the business model of the broadcasters no longer works. Advertising dollars have become so fragmented that it is almost impossible to generate enough advertising revenue to support local TV stations. At the same time, the rise of technology has made it more cost-effective to deliver national programming. Local content has all but disappeared on television. (In fact, local news has historically been a requirement of federal regulators, not a demand of consumers). The same thing that is happening to the newspaper industry is happening to television.
So the broadcasters are attempting to get a slice of the cable companies’ distribution pie. Failing that, they are now attempting to add a surcharge to cable bills to pay for “local television”. Consumers don’t differentiate between the content of television and its distribution. They will most certainly see this as a price increase on the total cost of television to them. The cable companies are resisting, as they realize that the additional cost will likely reduce their customer base. Hence the advertising war.
So the question is, why are these two industries fighting over a shrinking pie? In the short-term, it certainly makes sense. But in the long-term, even this battle appears to be senseless. If people valued local television, they’d watch it. If they watched it, advertisers would buy advertising. Fewer and fewer people are watching TV. This is especially pronounced among the under 30 set. This is a problem for both the cable companies and the broadcasters. Eventually there won’t be enough cable subscribers to support the cable companies. The good news for the Canadian cable companies is that they have multiple streams of revenue, including internet distribution. This cushions them from the eventual loss of the tv distribution business.
The networks and the distributors of television are both missing the long game — TV is dying. Fighting over the leftover scraps is not going to change that. So what is the solution? Better content? Different business model? Actually delivering local news? Perhaps they would be best served by thinking about the long game — how to transform the television business to meet the demands of the future. I’m not sure what the long game looks like for TV or newspapers. But I do know that the sky is falling, and no one seems to be helping to solve the problem.