The greatest thing ever written about the way television used to be—back before cable and cord cutting, before HBO, TiVo, Netflix and Tony Soprano—was “Within the Context of No Context,” an essay by George W. S. Trow. Published 33 years ago in The New Yorker, the piece made two essential points about the nature of TV in the network era. Back then, Trow wrote, TV had scale. It was defined more by the size of its audience, which was huge, than the content of its shows. It also had no middle distance. TV spoke to everyone in 1980. But it didn’t say much. It couldn’t. When there’s only one audience, one demographic, one mass of all ages and tastes, the content is inevitably flat—not bad, necessarily, but never great, never surprising or beautiful, and certainly never punch-you-in-the heart, stop-you-where-you-stand, change-the-way-you-think challenging like the best of TV is today.
In the network era, there was you, and there was everybody, and there was nothing in between. It wasn’t a great formula for art. But it was one hell of a business model. For decades, TV networks all but printed money. Like Google and Facebook today, they had a captive audience, limited competition and customers willing to buy ads year after year, in good times and in bad. Even a less successful show in the network era could be a moneymaker. A hit? You don’t even want to know. One hundred and six million Americans, just less than half the population of the country, watched the series finale of M*A*S*H in 1983. Last year, on HBO, Lena Dunham’s Girls, arguably the cultural hit of the year, drew about 630,000 viewers an episode, or less than one in every 450 people in the United States.
The networks haven’t disappeared in the past 30 years. They still produce shows that millions of Americans—and Canadians—watch. But the scale that once defined them, that guaranteed a mass audience almost no matter what they put on, is gone. It was lost to an audience scattered by taste among scores of niche channels and new services. In the past year, that process has accelerated. Profits at conventional Canadian broadcast networks fell 85% last year, according to the Canadian Radio-television and Telecommunications Commission, from $152 million in 2011 to $23 million in 2012. In the U.S., things were likewise grim. Broadcast ratings fell 17% among 18- to 49-year-olds last winter, compared to the year before. Even CBS, which owns the most popular comedy—The Big Bang Theory—and drama—NCIS—on TV, saw viewership decline over that stretch. “Networks are getting picked at from every direction,” Jessica Reif Cohen, a senior media analyst at Bank of America Merrill Lynch told The New York Times in May. “This year was the tipping point when the television ratings really fell apart.”
If you’re a network television executive, that sucks. But if you’re a television fan, it’s a beautiful thing. That’s the central paradox of TV today. The business has never been worse, at least for networks, but the content has never been better. Freed from the need to appeal to everyone, or at least not offend anyone, TV producers have created, in the past 15 years, a flurry of programs with narrative depth and complexity never before seen in the medium. In fact, if you have a good cable plan, the content you can get on TV on any given night is better, more diverse and entertaining on average than what’s showing at the Cineplex.
It’s hard to overestimate how big a cultural shift that is. But for business, it’s been an even bigger flip. Even if you put aside the ever-shrinking audience, the TV industry today is coping with challenges—and opportunities—that would have been unimaginable 20 years ago. Consider the current state of advertising. DVRs have allowed viewers to skip commercials, which has undermined ad rates. Online advertising is taking a bigger slice of a pie that used to be dominated by TV. Online and mobile ad spending combined totalled $3.1 billion in Canada last year. That’s 27% of the industry as a whole and just marginally less than what was spent on TV. Then there’s the growing threat posed by cord cutters, happy to get their TV from Netflix or iTunes or Pirate Bay, and the increasing calls from those who want their TV unbundled, who want, in other words, to be free to pay for only HBO, or AMC or Showtime, if that’s all they desire.
And what about HBO? The cable channel once known for its boxing and old movies did more than any other to usher in the era of prestige TV. But in recent years, it has had to share its spot at the centre of the TV conversation with upstart AMC, home to Mad Men and Breaking Bad. When the final episode of the latter aired in September, more than 10 million viewers tuned in live, a once unheard-of number for a cable show. That was still only good enough for 24th place in that week’s Nielsen ratings. But in the new era of TV, raw numbers are not everything. The business isn’t just about what viewers passively watch anymore; it’s about what they actively seek out and discuss. Indeed, largely because of Breaking Bad, Nielsen is adding a new hybrid rating that measures viewership and Twitter buzz together.
The future of TV, then, might not be about TV at all, at least not in the way we’ve conventionally thought about the medium, as a finite series of channels broadcasting on screens built for that purpose. The TV business today is already about creating content that spurs choices: the choice to subscribe to Netflix, or drop cable, to catch up on a show on iTunes, or talk about it online. In the future, the winners will be the ones that take that idea even further, delivering what viewers want, when they want it, in whatever format they choose.