Duh: The TV Business Is On The Verge Of Collapse
from the it's-happening dept
We’ve been noting for quite some time that the old TV economic model is unsustainable — and pretty much the only argument we’ve seen in favor of TV as it works today is that for now it still makes a ton of money. But that’s a reason why the TV guys like it — not a reason for the public to continue to embrace it. In fact, with cable/satellite TV costing so much these days just to feed those economics, more and more people are seeking alternatives. The Hollywood guys remain in complete denial about this, insisting that when people “grow up” they suddenly decide to pay tons of money for TV.
But that’s increasingly not the case, and it’s not difficult at all to predict that TV is facing a pretty big crisis, which could lead to a pretty rapid decimation of the business. At that link, Henry Blodget makes the right comparison: to the newspapers. They denied there was any real problem with their business for ages — and were shocked at how quickly the market changed.
This is a point that we’ve raised for over a decade concerning businesses going through disruption. The standard refrain when the disruption comes along is to insist that it’s no threat at all. After all, it’s “crappy” compared to the established player. But then things get better, and it starts eating into market share — and we’re told that it’s just a temporary thing, or a “cyclical” market. At some point, the blame game starts ramping up — and we’re told that “piracy” or stupid execs giving things away for free are to blame. And then there’s my favorite: execs in the legacy industry demanding that they can’t change until someone tells them how to make the same amount of money and spend the same amount of money as before. But that’s not how disruption works. While it almost always creates larger markets, it does so by changing the game and having that money pop up somewhere else — somewhere that’s difficult for the legacy players to capture without being true visionaries (which they almost never are). And that change happens really, really fast. So when you see legacy execs demanding to know how they can make what they used to make — as Ari Emanuel recently did concerning television — it’s a key sign that the legacy business is about to collapse, and its main players have no idea.