TV’s Ad Apocalypse Is Getting Closer

Disney’s decision to build its own streaming service is smart. It’s also the latest sign that the traditional cable bundle is doomed.

Disney announced on Tuesday that it will stop selling content to Netflix by 2019 and will instead launch two streaming services—one with sports content from ESPN (which it owns) and another for movies. It is a dramatic announcement with far-reaching implications for the future of television and, pulling back the lens even farther, the U.S. tech and media landscape.

Before getting to the future, let’s start with the present of television. Pay TV—that is, the bundle of channels one can buy from Comcast or DirecTV—is in a ratings free fall among all viewers born since the Nixon administration. Since 2010, the time that Americans under 35 have spent watching television has declined by about 50 percent, according to Matthew Ball, the head of strategy at Amazon Studios.

As a result, Disney’s cable-television business, once the crown jewel of the company, is now weighing down its stock. Where are its viewers going? Many have decamped for streaming services like Netflix, where the number of hours of video entertainment consumed has grown by about 700 percent in the same time.

 

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