Linear TV Is Crashing As Streaming Dominates: What Does That Mean For BET, Revolt And TV One?

Linear TV Is Crashing As Streaming Dominates: What Does That Mean For BET, Revolt And TV One?

linear TV

Linear TV, the traditional medium that delivers content via cable or satellite on a predetermined schedule with all viewers watching simultaneously, has been overtaken in terms of market share by video-on-demand streaming, which allows viewers to access content when they want.

Traditionally loyal cable and satellite TV subscribers, Black households are increasingly cutting the cord, according to a 2021 study from market research firm Horowitz. Data showed that pay-TV penetration among Black households sank from 88 percent in 2017 to 61 percent in 2021.

In the survey, 60 percent of Black respondents said they watch content that’s specifically geared to Black audiences at least weekly.

“Many companies are late to the game, only now focusing on the Black audience in the context of BLM and new diversity mandates,” said Adriana Waterston, Horowitz’s chief revenue officer and leader in insights and strategy.

Streaming viewership exceeded cable TV use for the first time in 2022, according to Nielsen. And this year, linear TV viewing has fallen below 50 percent of total share among U.S. viewers for the first time ever as streaming grows in popularity, according to Nielsen’s July 2023 report.

Cable viewing dropped below 30 percent for the first time, down 12.5 percent year-over-year. Broadcast usage decreased to 20 percent, down 5.4 percent YoY. Meanwhile, streaming services accounted for a record high of 38.7 percent of total U.S. TV usage, skyrocketing 25.3 percent in the past year.

In the past, people who switched from cable TV to streaming cited lower prices. However, streaming is catching up. The Financial Times recently published data that showed the top U.S. streaming platforms will cost $87 per month in total this fall. The average cable subscription is cheaper at $83 per month, according to the FT.

Urban One claims to be the largest distributor and leading voice speaking to Black America, providing radio broadcasting, radio and digital advertising, political advertising, cable TV and syndicated radio shows and events. It owns the TV One cable channel after acquiring Comcast’s stake in 2015.

Urban One CEO Alfred Liggins spoke in July about the company’s fourth-quarter results in a press release. Net revenue was about $132.6 million, an increase of 1.6 percent from the same period in 2021.

“The audience under-delivery at TV One has continued into 2023, with advertising revenues down -15.9 percent for Q1 and down mid-to-high single digits for Q2,” Liggins said. “Our TV affiliate revenues in 2023 are down approximately 7 percent year to date. This will put pressure on the TV One EBITDA, which we currently expect to be in the range $88-90 million for full year 2023.”

Overall broadcast and digital operating income at Urban One increased 7.9 percent from the same period in 2021. Liggins said he was pleased that the company’s adjusted earnings came in “right on top of our full year guidance at $165.6 million, a new highwater mark for Urban One.” Urban One’s digital segment grew revenue by 24 percent while ad sales at its cable TV segment declined 8.4 percent.

Black Entertainment Television, a cable channel targeting African American audiences, is owned by Paramount Global. In July, BET launched a new lower-priced ad-supported tier to its BET+ streaming service, Variety reported. The “BET+ Essential” service costs $5.99 a month, compared to $9.99 for the ad-free version.

BET revealed subscriber numbers for BET+ for the first time — more than 3 million, and the company said it expects it to grow. “Advertisers have just been very excited about this opportunity to avail themselves of the expansion in reach,” BET president/CEO Scott Mills in May.

“What our advertising partners understand is that it’s important to reach a Black audience, but it’s important to reach the Black audience in environments that the Black audience deems to be culturally relevant.”

As for adding a lower-cost ad tier, Mills noted, “one of the things we always say about BET is, the Black community is really heterogeneous. People don’t think about how diverse the black community is. And one of the things we wanted to do with the approach to access to BET+ is to really make sure that we had as diverse array of access options as the diversity exists within our community. And so we have some people who are going to clearly prefer the premium service without the ad experience, but there are going to be a number of people who are really going to value the ability to access the service at a lower price point. And so that we really thought particularly given our insight into our community, it was a really important thing to deliver.”

Revolt Media and TV CEO Detavio Samuels has seen explosive growth in the digital cable TV network over recent years. Revolt shows can be viewed live on TV or download via the Revolt app to stream anytime. Founded by Sean “Diddy” Combs in 2013, Revolt focused on educating, inspiring, and uplifting the next generation through the power of hip-hop. 

Samuels spoke to Yahoo Finance in early 2022 after coming off a year of pandemic-driven triple-digit growth in Revolt’s advertising business.

“You see what’s happening in terms of cord-cutting with the cable business, yet Revolt had the biggest year in the history of our cable affiliate business,” Samuels said. “We doubled our EBITDA … and while doing all of that, we still managed to triple our investment in content, grow our employee base by almost 50 percent … We also saw triple digit growth across all of our viewership metrics when you look at things like YouTube, our website, and social media.”

Revolt’s core audience is Gen Y and Gen Z, 50-50 male and female. But Samuels said 70 percent of hip- hop is purchased by white consumers globally, “and so Revolt is just mimicking that strategy where we are designing for our community. We’re designing with them in mind, but then inviting the rest of the world to the content. That’s how we get scale.”