A tipping-point moment in cable television history happened sometime – nobody knows the exact date – in the fall of 1987, when the industry’s presence among U.S. homes topped 50 percent for the first time.
The achievement produced legitimate cause for celebration, as an industry that had spent its first three decades struggling to survive could now effectively claim to be the dominant medium for television reception in the country.
That’s “dominant” with an asterisk, of course. What it really meant was that more than half of TV households received television on a primary TV set – over-the-air broadcast signals and all – via a cable connection. (Over-the-air signals were still available to almost every U.S. TV-owning household, so broadcasters could, and did, quibble with the semantics.) Still: Industry pioneers who had battled telephone companies, utility companies, TV broadcasters, movie studios and even theater owners in courtrooms, in the U.S. Congress and at the FCC deserved their day.
1987 also was the year when a second important milestone came to pass, which was the migration of Sunday night National Football League live-game telecasts to cable’s ESPN beginning in November.
Taken together, the two events symbolized a dramatic upheaval going on in television and media, serving notice that the television broadcast industry could no longer take for granted its supremacy as a means for dishing up television to the masses.
That upheaval seems to have reached a new zenith of late, with audience levels for “cable” programs now showing up routinely among the nation’s top 10, beating out or squeezing in alongside top-rated broadcast network TV programs like Fox’s “American Idol” and CBS’s “NCIS.” On the first Sunday of last month, the most-watched show on television was History’s “The Bible,” whose ratings trounced anything on broadcast TV or anywhere else.
But it’s the definition of what constitutes a “cable” network that has changed dramatically since ESPN captured its NFL prize in 1987. Today, “cable” networks can just as fairly be thought of as “satellite TV” networks or Internet video networks. And like a triple-crown ballplayer whose batting average falls back to earth, the U.S. cable industry is now experiencing a sense of statistical déjà vu.
Steadily since mid-2002, the household penetration of wired cable has been declining, from a peak of 70.6 percent in May 2002 to 59.3 percent today, according to Nielsen statistics maintained by the broadcast industry group TVB. Over that 11-year period, the presence of alternative multichannel video platforms, mostly satellite TV, has doubled to 31.7 percent from 15.1 percent. Worse for the traditional cable industry is the realization that a good share of the current “wired cable” estimate – about 8 percent – reflects the presence of rival delivery systems run by the likes of Verizon, AT&T and Frontier Communications.
Backing out the telco-video share leaves the incumbent cable industry with a bit more than half of the U.S.
pay TV market – slightly above where it stood in 1987.
The market share shifts mean very little from a consumer adoption standpoint, as overall pay TV penetration now stands at a nearly saturated level of close to 90 percent. But it’s interesting to look back on what was a remarkable industry achievement – tipping north of the 50 percent mark – in the context of today’s video marketplace.
Just as the cable industry scratched, clawed, lobbied, invested and persevered its way into the media industry mainstream in the late 1980s, other newcomers and familiar hands have more recently done the same. And like cable itself, these satellite and telco-video intruders also stand to be gamely tested by the newest of all television disruptors, which are the millions of video-capable mobile devices TV lovers increasingly rely on to watch the shows they want. A recent estimate by the global mediabuying agency GroupM suggests that as much of 12 percent of TV viewing today occurs over these platforms, escaping for the moment the probing reach of Nielsen and other media measurement companies.
The numbers offer reminders of how fluid the television market has become since cable first arrived to challenge the incumbent broadcasting systems decades ago, and how easy it is to make leap-of-logic assumptions about the marketplace when you’re shoulder-deep in it. It seemed all but impossible, seeing the world with fresh eyes in 1987, to imagine that cable’s linear growth trajectory might actually one day reverse. But that’s exactly what has happened. Goes to show you: There’s always a new kid waiting in the wings.