Here’s one theory on which cable networks will die

Analysts from Barclays think a new model for TV is coming, and that “marginal” cable networks won’t survive.

In a massive media report on Monday, the analysts argue that an increase in supply of content will work to crush these marginal, fringe networks, specifically those under the umbrella of Viacom, which owns over a dozen TV networks ranging from MTV to Comedy Central to Spike.

Why? Although the supply of TV content continues to ramp up, Barclays highlights that demand has a natural ceiling.

“Given that the total amount of TV viewership in the US is already at 4 hours and 11 minutes, and total media consumption is at 12 hours, it is unlikely that more content results in an increase in consumption,” the analysts wrote. There’s only so far demand can so up.

So what will the increase in supply do?

The analysts say it will have three effects:

  • Viewership peaks will be lower. The hits won’t be as big.
  • “Average” content will get viewed more (because of improvements in the process of discovering new shows that aren’t big hits or aimed at niche audiences).
  • “Marginal content” will go away altogether (“e.g. Viacom”).

In the Barclays future, networks that rely on blockbusters will feel their profit margins tighten.

These hits will reach fewer people, but continue to cost the same amount of cash to produce. This isn’t good news for some networks. “Marginal cable networks are unlikely to be able to survive longer term in this ecosystem,” the analysts write.

But Barclays doesn’t think that means networks should stop swinging for the fences and producing blockbusters. Analysts just think those shows will play a different role. Instead of directly helping the bottom line, blockbusters will help raise “awareness” for the platform. The analysts say blockbusters could actually turn out to be loss leaders, and point to Netflix’s “House of Cards” and CBS/NBC’s “Thursday Night Football” as prime examples.

NOW WATCH: The 8 best movies on Netflix you’ve probably never heard of

Please enable Javascript to watch this video
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Most Popular

To Top