(1) A lot of people still watch TV live -- even if *you* don't.
NBC broke all the previous Olympics records for average primetime audience despite showing delayed programming in an environment of supposedly fractured attention. This is pretty strong anecdotal evidence that, even if my Twitter feed is full of cord-cutters, lots of Americans still pay for live TV and like it.
And here's the non-anecdotal evidence: One hundred million households pay for live television -- practically the same as four years ago. The cord-cutting revolution (well excavated in this report by
Rebecca Greenfield) is alive and well, but it's much smaller than your typical tech blog will let on. The more important figure for cable is that the number of live-TV hours watched per-person per-day has fallen by only about three percent over the last four years. That's a turning point (see #3). But it's not a cliff. Cable companies, perceiving that their pay-TV audiences have plateaued, are hedging by offering broadband and phone services, while media companies are hedging by selling access to delayed video content to companies like Netflix.
(2) It would be weird for media companies to use this moment to blow up their business models.
Why didn't NBC care that they were getting killed by the Hashtag Mafia? Because NBC needed to make money more than it needed make friends on Twitter. NBCUniversal (owned by Comcast) paid about $1.2 billion for the rights to broadcast the London Olympics, and starting to make back that money necessitated selling ads in primetime, when companies would pay the highest rates. Not willing to give away content that would subvert the pay-TV model, they required a cable subscription in order to access live-streaming online. The upshot: If you wanted to watch anything, you had to pay for TV. If you wanted to watch the most important stuff, you had to wait for primetime.
Some analysts clamored that NBC was violating the Innovator's Dilemma by protecting its legacy business rather than riding the wave of the future and opening up live broadcasting to anybody willing to pay for it a la carte. Time might prove these analysts right, or wrong, I don't know, but either way, let's agree that Not every dilemma is an Innovator's Dilemma!, and managing a beleaguered business model is not the same as being steadfastly anti-innovation. In the end, NBC's strategy paid off with the best ratings in Olympic TV history and a historic accomplishment in live-streaming. Whether this teaches the company the right or wrong lessons about the pay-TV business, we'll have to wait and see.
(3) There's no denying that attention is fragmenting, and capturing it, monetizing it, and advertising it, is the great challenge for TV video content producers.
If we are at the dawn of a revolution in pay-TV, here's something that will help you understand why. NBC broke the Olympic audience record by broadcasting the games across six networks -- NBC, NBC Sports Network, MSNBC, CNBC, Bravo, and Telemundo -- and live-streams viewable on computers and mobile devices all day long. Whether NBC and other media companies are driving or responding to the dispersion of attention is besides the point: Attention is dispersing all over the place.