It’s really obvious to trace the disruption of the media industry to Netflix and similar streaming services. Everything was perfectly fine before that, right? It is so easy to ignore the fact that disruption began long before Netflix became mainstream; it began with the growth of cable television.
First, let’s clarify the distinction between broadcast television and cable television. Broadcast television consists of NBC, ABC, CBS, FOX and to an extent, CW. These channels have the largest reach in terms of viewing households, the standard by which reach is measured for television. It is also a very diverse audience that watches, they are measured in terms of the number of adults between the ages of 18-49 watching a program. In terms of how an advertiser chooses to spend their dollars, broadcast channels are sort of a necessity, but may not always be the most efficient use of money. These commercial spots are often tens of thousands of dollars each, if not more.
Cable television however is much more niche in their viewer composition and in the type of programming they offer. Cable TV allows advertisers to reach a more targeted market due to the nature of their programming. The viewers of these channels can be guaranteed on bases such as women between the ages of 25-49 or men between the ages of 18-34.
In addition to allowing advertisers to spend their more dollars more efficiently in targeting, the cost per commercial spot on cable television is significantly cheaper than its broadcast counterparts. So while the reach of cable television may not be as great, it a lot cheaper and a lot more efficient in terms of advertising spend.
There are hundreds of cable channels available to viewers; and because of this, viewers have hundreds of options when it comes to choosing what to watch. The increase in available cable channels has fragmented viewers and ratings alike. There is an ongoing competition between the networks to put out the best programming to attract viewers to their network. There is a big push for fresh, new programming every new season, and this has led to more failed freshmen series for each network. It is rare for a TV series to achieve lasting success in such a competitive landscape.