13.4 The Impact of Streaming on Traditional TV

Streaming platforms have revolutionized how we consume TV, causing a seismic shift in the industry. Traditional networks and cable providers are losing viewers to on-demand services, forcing them to adapt or risk becoming obsolete.

This disruption has led to industry consolidation and new business models. Streaming services are changing advertising, content creation, and distribution strategies. Traditional TV players are launching their own platforms to compete in this evolving landscape.

Traditional TV Disruption

Decline of Linear Television and Cable

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• Linear television follows predetermined schedules for broadcasting content
• Viewers tune in at specific times to watch programs
• Cable and satellite services experience declining subscriber numbers
• Cord-cutting trend accelerates as consumers opt for streaming alternatives
• Traditional TV providers lose market share to streaming platforms

Industry Disruption and Consolidation

• Streaming services disrupt established television industry practices
• Traditional networks and studios face increased competition from tech giants (Netflix, Amazon)
• Media companies consolidate to compete with streaming platforms
• Mergers and acquisitions reshape the entertainment landscape (Disney-Fox merger)
• Vertical integration becomes a strategy to control content creation and distribution

Streaming's Impact on Business Models

Evolution of Advertising and Ratings

• Streaming platforms introduce new advertising models
• Targeted ads based on user data and viewing habits replace traditional commercials
• Ad-free subscription tiers offer alternative revenue streams
• Traditional Nielsen ratings system becomes less relevant for streaming content
• Streaming services develop proprietary metrics to measure engagement and success

Content Licensing and Original Programming

• Streaming platforms invest heavily in original content production
• Exclusive licensing deals for popular shows and movies become crucial
• Content creators gain leverage in negotiations with multiple distribution options
• Traditional networks lose access to hit shows as studios launch their own streaming services
• Bidding wars for high-profile content drive up production costs

Emergence of Network Streaming Services and Hybrid Models

• Traditional networks launch their own streaming platforms (CBS All Access, Peacock)
• Media conglomerates develop streaming services to compete directly with tech companies (Disney+, HBO Max)
• Hybrid models combine elements of traditional TV and streaming (Hulu + Live TV)
• Tiered pricing structures offer different levels of access and ad exposure
• Bundling of streaming services with other products or services (Amazon Prime Video)