Simulmedia's Dave Morgan: There's Still Plenty of Time For Broadcasters to Turn Things Around

Originally posted on Video Ad News

Last week many of the shares in US broadcasters tumbled, sparking fears in some quarters and excitement in others that TV armageddon is finally upon us. It isn’t, of course, but last week’s shock was yet another sign that the pay TV model is starting to creak and needs to evolve sooner rather than later. Here Dave Morgan, CEO of Simulmedia, a TV targeting company, explains what has been going on, whether the TV industry has time to turn things around, and Netflix’s impact on the TV industry.

First, could you provide a little background on what has been happening to the stocks of US cable TV companies?

Last week was all about investor nervousness in the long-term position of TV companies. Everyone has assumed that while there might be headwinds on the advertising side of their businesses, that affiliate fees from cable, satellite and teleco were locked in for years into the future and would grow keep growing. Disney’s warning on ESPN’s fees from future cord-cutting caused a lot of folks to reassess the long-term financial position of the industry.

Is there time for the TV industry to turn things around? What can TV companies do to stem the tide?

There is plenty of time. First, the TV companies need to do a better job marketing themselves, both to consumers and advertisers. For consumers, they need to do more to build direct relationships and sell product directly. For advertisers, they need to better communicate the unique power scale and ability to drive sales that they bring relative to folks like YouTube, who is getting all of the headlines but is tiny compared to TV.

While OTT services like Netflix and Amazon are often portrayed bolt-on services, aren’t they increasingly looking like the next generation of pay TV platforms? Do you think they can expand their content offering without eventually introducing advertising?

They do look like next gen TV, but still rely on TV company content, developed by TV companies and marketed and tested on TV distribution.

Can you name any examples of US TV companies who you think are getting it right?

I think that they are all doing some things really well. FOX showed the world with Empire that TV can still build great shows with outstanding ratings, and keep growing them. Turner has been turning CNN around. NBCU, Viacom, Turner and Discovery are all now offering digital like, data-driven ad packages on linear TV that look more and more like audience targeting in digital. CBS is offering advertisers proof of how they ads drive sales. They all need to do more and bigger, but many are testing the right things.

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