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Bandwidth Burnout

5/07/2012 12:01 AM Eastern

“After several years of consistent year over-
year growth, traditional TV viewing declined
one half of one percent, or roughly 46 minutes per
month.”

So began Nielsen’s Cross Platform Report for the fourth
quarter of 2011. A yawner to some,
but deeply troubling to others.

All theories were floated. Nielsen itself couldn’t put
a finger on precisely why, at one point even blaming
it on the weather. I am not making this up. Or economic
factors, it speculated, such as a lack of new
households. Or just a “leveling off after a period of
sustained growth.”

Cord-cutters! cried others. But alas, there is scant evidence
(and I’d call this scant) that people are canceling
cable-TV subscriptions in big numbers in favor of alternate TV
services.

Several others speculated that such a tiny number could actually
be a margin of error in this particular Nielsen survey.

Whatever you believe, it certainly doesn’t make a big difference,
because the numbers are tiny. But I’d argue the
implications are huge.

The average American watches nearly five hours of
video each day, 98% on a traditional TV.

Viewing is shifting, and bandwidth is expanding.

But here’s a fact that is often ignored: There is a
limit to how much video a human wants to consume,
and I imagine we are very close to maximum capacity.

The cable-TV industry has seen this show before:
Companies saw the unimagined video-subscriber growth
that fueled the industry through the ’80s and ’90s come to
a complete stop today.

This limited viewing is one reason why TV Everywhere
has so many converts. (“We’ll get ’em on one screen or
another!”)

What will this mean for you? Business in this industry will become
more of a zero-sum game, as competing interests go after
a bigger share of a pie that may — or may not — be shrinking.

 

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