Primetime Mystery: Where Did All the TV Viewers Go?

Here's the wow-quote of the day, from Jeff Gaspin, the head of entertainment at NBC, explaining to The New York Times, with remarkable clarity and certainty, that watching TV shows on-demand is more satisfying than watching them live.

"The commercials broke the tension ... I hate to say this to the AMC executives and everybody else in the business, but I will never watch 'Walking Dead' live again."

Is that a gaffe? A truism? Either way, it's right. Fewer people are watching the networks live because viewers have found better television and/or better ways to watch it. Live ratings have declined for 14 straight quarters across the networks. Meanwhile, NBC is getting regularly smacked around by ABC, CBS, and Fox. It's barely outperformed Univision when you take out sports, according to TV by the Numbers.

But the latest news -- that the networks are facing the mother of all spring swoons -- is a short-term acceleration of a long-term trend. The networks' share of primetime TV audience (dark blue in the graph below) has declined from 45% in 1985 to 25% in 2009. Basic cable ate the networks' lunch post-dinner audience, and now it's technology's turn gobble up what's left.




Even with this long trend line (and despite the fact that viewers often unplug in the spring), there is a sense that we've reached a tipping point thanks to what Gaspin calls "built-up libraries." There is more good stuff to watch not-on-live-TV than on live-TV, and even the head of entertainment at NBC knows it.

Television technologies are dragging us away from live television, to a world of smaller screens, shifting "windows," and no more ads. In 2000, a company called Netflix was experimenting with movie rentals. Now they have more than 20 million streaming customers. In 2005, about 1% of households owned DVRs. Today, it's more than 40%. In 2006, Hulu didn't exist. Today it has just under 30 million monthly uniques, with more than 1 million paying subscribers. In 2009, there were no iPads. Today, there are 60 million, and most of them are in the United States. That's a Cambrian explosion of options for "watching TV" without literally watching an actual TV.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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