The Politics of the Television Business

For TV and cable, 2012 was a banner year for political ads sales. With something like $9 billion in campaign spending on the table – from just the presidential election – it was raining soup for anyone who was in the business of selling space to run :30 of video on a large screen shared by many viewers.

But 2012 is probably the last year that broadcasters will be able to hold out their bowls.

The TV business – the ad-supported watching of programs by a large group of people in roughly the same time period – is fracturing in much the same way that the print business fractured at the beginning of this century and for the same reason: New, Internet-delivered services let consumers make choices. The choices are racheted up from the use of DVRs – which change the time at which you watch something. A variety of new services let viewers decide HOW to watch.

The best publicized example is a company called Aereo which has begun serving New York and which plans to expand to 22 other cities. It’s so scary that TV broadcasters have sued to get the company, which takes over-the-air broadcast signals and sends them to computers, shut down.

Aereo’s important not just for the publicity but also because one of its investors, Barry Diller, knows the TV business like there’s nobody’s business. He created “Movie of the Week” AND he built Fox out of pretty much nothing but a bunch of lame UHF channels. He knows his enemy and his strategy – to create a group of consumer who will email Congress when someone takes away their Aereo – is a well-tested strategy. Ask any broadcaster.

But even if Diller doesn’t get his way – and so far, the courts have given him the green light – other services are changing how voters watch TV. Dish-TV encourages its customers to skip ads. Netflix and Amazon – once happy to just sell movies – are getting into the TV production business at the same time they’re bidding against cable programs to acquire the rights to run TV shows.

Which brings us to every political person’s favorite show, “House of Cards” and its auteur/actor Kevin Spacey. A lot of folks have been talking about Spacey’s speech before a gathering of UK media execs in which he spelled out how Netflix – and shows like “House of Cards” are signs of upheaval in the business. For those of you who read Spot-On’s regular blog posts, that wasn’t news, of course. But, well, we like to state the obvious more than once. So here’s a link to an interview between Spacey and Charlie Rose previewing the speech. And here’s the MacTaggard lecture.

There’s more to come as New York Times columnist Dave Carr spells out in this column which, for anyone wed to the idea that TV ads are the only or best way to reach viewers and voters, is a must read.