Prediction: The end of cable TV

YouTube takes aim at cable with new shows, as Canadians increasingly cut out the broadcasters and stream video directly to any device.

(Source images: iStock)

What it means to you:

It’ll be easier to cut the cable cord, but you will likely spend that cash— and even more—on other means of TV delivery.

More: Will The Hobbit be the biggest blockbuster of all time?

This year, television is set to make a major jump into the digital age. Sitting passively on the couch, remote in hand, simply soaking in your favourite shows will feel increasingly passé. Netflix, YouTube, Amazon and Apple, among others, are stretching the boundaries of online video delivery and stepping into the roles of TV networks by commissioning high-profile original series. Traditional broadcasters, meanwhile, are fighting back by aiming their content—and ad dollars—not just at your HD plasma or LCD, but your mobile phone and tablet.

Canadians appear comfortable moving beyond cable. According to a 2011 Comscore study, we watch more video online, be it streamed or on-demand, than our American or British counterparts. About 90% of wired Canadians do it, with the average user watching 251 videos a month, compared to 204 videos in the U.S. And advertisers are noticing. According to the Interactive Advertising Bureau of Canada, digital video ad spending grew more than 42% in the year leading up to September 2011.

Although Netflix is best known for delivering movies, the company is making a big push into streamed episodic programming. It has more than a million Canadian subscribers, but has been criticized for the limited movie and TV offerings in its Canadian library. But in December, Netflix announced that Canadians would be getting much more choice this year (though it has yet to release specifics). We will also see the results of the original content deals Netflix signed in 2011. Its first original series, Lilyhammer, starring Steven Van Zandt of The Sopranos, starts streaming in February. The company also outbid the likes of HBO for House of Cards, a political drama by director David Fincher starring Kevin Spacey, set to debut later this year. And, to the delight of “never nudes” everywhere, Netflix bought exclusive rights to a new season of the much-mourned cult hit Arrested Development. Up to $300 million of Netflix’ content budget will now be going toward original shows, the company has said. “Broadcast TV will decline like landline telephony,” CEO Reed Hastings recently predicted at a media conference.

YouTube, meanwhile, is moving beyond cute cats and laughing babies with the launch of dozens of new original-content channels aimed at snagging traditional TV viewers. In October, the Google-owned site announced more than 100 new production partners, including stars Jay-Z and Amy Poehler, newswire Reuters and film producer Lionsgate. These deals are expected to generate about 25 hours of new daily programming, and mark the company’s first real challenge to traditional cable. YouTube has also teamed up with Disney to deliver web-exclusive series, starting with one based on the smartphone game Where’s My Water?

Faced with this new competition for viewers, broadcasters are pushing their programming to more platforms. Paul Burns, Shaw Media’s vice-president of digital media, is convinced that “the traditional remote control will become obsolete and replaced by your tablet or mobile phone.” The interactivity available on these devices will also create a more direct link between marketers and consumers, taking traditionally passive viewers “from a lean-back to a leanforward mentality,” he says. For their part, TV producers will have more platforms and thus more ways to tell a story. Burns expects DVD-style behind-the-scenes features and director’s cuts to become common TV extras.

Even how shows are delivered to our TVs will change this year, with cable and satellite increasingly augmented by streaming. Industry analysts are expecting Apple TV to launch as soon as late 2012. Set-top box Roku, which helps users play online video on their TVs, is also coming to Canada this year, joining devices like Boxee and Microsoft’s Xbox console. This is the year to welcome the Internet in your living room.

Will The Hobbit be the biggest blockbuster of all time?

The Hobbit

The Hobbit

“Studio executives are coming to grips with the reality that they have as much chance of reversing the…shift of audiences from the theatre to the home as King Canute had in commanding the tide to recede.” So Edward Jay Epstein declared in his 2010 book, The Hollywood Economist, and the situation’s only gotten worse since: last year saw North American movie attendance reach its lowest levels since 1992, with revenue down nearly 5% over 2010 and young people in particular staying home.

So, in 2012 expect desperate studios to make even more extraordinary efforts to draw us in. That means hard marketing pushes for proven brands like Batman and Spider-Man, both returning to screens this summer. But one film will rule them all: the long-anticipated adaptation of Lord of the Rings prequel The Hobbit.

As has become standard for bankable intellectual property (see the Harry Potter and Twilight franchises), the book is being split into two films, the first of which, An Unexpected Journey, will arrive in time for Christmas. More of a children’s story than was LOTR, it will boast even broader demographic appeal, and throngs of rabid Tolkien fans will guarantee it a boffo opening. That momentum will carry it through the following spring, when a lack of competing blockbusters will allow for the same kind of run that helped current record holder Avatar reap more than US$760 million in North America alone.

Although New Line Cinema’s top-grossing LOTR film earned just half that total, we think The Hobbit will far eclipse its predecessors’ take, not least because this movie is in Warner Bros.’ hands. No company has a better feel for hyping this kind of picture—it managed to turn the brooding, violent Dark Knight into a half-a-billion-dollar hit—and work on the marketing for The Hobbit has been underway since 2010. Expect Warner Bros. to roll out an unprecedented hype campaign between now and opening night—and for its efforts to pay off handsomely.
—Jordan Timm