Have You Seen Me?

From the LA Times:

Where did everybody go?

One month into the new TV season, overall audience levels have taken a hard tumble from those last year. New shows have sputtered, and scores of established series have slipped in the standings. Even some of the biggest hits - "Friends," "ER," "Survivor," "CSI" and "Monday Night Football" - have lost millions of viewers.

Network executives can't explain it.

For the first time ever, overall television viewership is down from one fall season to the next, the biggest shock to hit that industry since the Nielsens showed that cable networks were significantly cutting into the market for the big broadcast networks. But this time, nobody seems to know where they went. Even more troubling, the biggest drop was in the most coveted viewers:

One demographic group, in particular, was noticeably smaller: young men. The industry is fretting as 8% of men ages 18 to 34 have apparently sworn off television this season.

"It's hard to buy into the explanation that all of these young men suddenly decided to stop watching television at the same time," said [Lloyd] Braun [ABC Entertainment Chairman], who speculated that a factor for ABC could have been two lackluster "Monday Night Football" matchups.

18-34 year-old males are the most desirable audience for TV because they are the last, best hope for advertisers wanting to influence brand choices, that demographic controls a disproportionate amount of the disposable income, and if you can "brand" them, they'll likely stay with the same products for the rest of their lives (when they will control an even larger chunk). So this slippage is a deadly threat to TV and advertising's bread and butter, these are the eyeballs they have contracted to deliver. This year alone it may cost them hundreds of millions of dollars in refunds and rebates to the advertisers, if November "Sweeps" fail to deliver the numbers the networks promised.

Hmmm.... Hundreds of thousands of 18-34 year old males stopped watching TV, where have I seen something like that before? Oh yeah, they're over here, the bulk of the customer base for MMO's comes from exactly that segment of the population, putting in 20-25 hours a week in patterns remarkably similar to those of television viewing. That's not to say that our kind of MMO is the sole cause, this year's dip may have as much to do with XBox Live as with EverQuest. But I am morally certain that it is due to online gaming, and it looks like the TV industry may have a hint of that as well:

"They're not putting on a lot of shows that might appeal to a 25-year-old," he [Brad Adgate of Horizon Media Inc.] said. "These guys are probably doing something else - playing video games or surfing the Internet or reading Maxim.

For a long time, TV programmers and the viewers have had a deal: They'd put out shows, and we'd watch them. They'd put out less of it, and we'd still watch it. They'd put in more commercials, and we'd still watch it. "The Honeymooners" actually only ran for a single year, but back then a "season" was 39 episodes. By the time Star Trek ran for three, a "season" was 26 episodes. And this year, a full "season" worth of a show is 13-18 new episodes, the rest of the year will be filled with re-runs and pre-emptions. The episodes are shorter as well, down to a 44 minute "hour" (which may get "stepped on" by local affiliates or cable companies for the loss of another minute). Even by strictly objective measures, the quality of TV programming has been dropping steadily for a long time.

But they've been getting away with it, because TV's real customer isn't the viewers, but the advertisers. Actually producing new shows is an overhead cost in the process of delivering the eyeballs, and every business tries to minimize their overhead. Since how much new entertainment they delivered didn't have much to do with how many eyeballs they could deliver, it was only logical to spend less on it. After all, where were you going to go? There wasn't anything new to watch anywhere else, either. And now the chickens are coming home to roost.

This seems to be my week for playing Chicken Little, but this is a far bigger potential threat than anything academia alone might do. Samuel Clemens advised "Never engage in a war of words with anyone who buys ink by the barrel." We may already be in a fight with an industry that has their own satellite-beamed presence in every living room in America. If TV starts viewing these games as a competitive threat to their bottom line (and I'm pretty certain we are in the long run, those gaming hours have to be coming from somewhere), this will get to be a very bumpy ride. Nobody is "fair and impartial" when they think you're picking their pocket.

Comments

[DuckiLama]

1.

I'm not entirely sure, but you seem to imtimate that the Networks and Cable Companies will wage a media war on MMOGs. This already happens on a small scale when 48 Hours rehashes the latest NYTimes rehash of a SciAm tidbit about a study showing how certain personality types are easily addicted to virtual worlds.

If any network execs are reading this, this approach, logically, doesn't work.

What might work is a sort of Public Access version of games - go find those small dev houses working on MMOGs, give 'em a little funding, a bit of free adverts, get them to insert advertising space that you resell, and provide your viewers with discount codes or free access to those worlds. Maybe you add $5/month to your 'scrip fees and those that pay get the codes. You pass on a royalty to the developer, keep the rest, and sell adspace/time to your advertisers who want to reach this demographic. Login ads, account maintenance page ads, logout ads, in-game, embedded ads(where appropriate), ads players read/clickthru in exchange for in-game currency/xp.

Instead of the cableco giving you a free DVR/tuner, you get a free xbox-like tuner/MMOGplayer and an account that gives you access to all of the cableco's sponsored games as long as you are a subscriber. Like an in-home internet cafe, a la the ones described in Korea that resell access to MMOGs. Instead of On-Demand movies, you've got On-Demand MMOGs.
Indy developers get a bit of funding and exposure, new ideas get tried - actually those will get tried anyway, but this way, they get SEEN and PLAYED.

They'll never go for it, but this would be a better way to wage a War for Eyeballs than running some piece on 60 Minutes about a MMOG-addicted GenXer that gets seen by nobody but low-tech Baby Boomers(yes, oversimplification, but you get the point).

Does anyone else think this would be a good, innovative approach to embracing this market that doesn't work like TV? That it would be a good way to encourage new ideas with a minimum of risk? That cable-cos/networks could charge a hefty premium for this type of adspace because they can deliver very specific information about who responds to which ads and when?

Am I just insane?
I wish I'd applied for a patent before posting this, but what the heck.

[Jamie Hale]

2.

You might be insane, but it's a damn good idea. Howevero, having fought the power and gone back to TV over an antenna (a what?), I'd need to see some pretty good quality before I jumped back into the game.

[Dave Rickey]

3.

You're trying to jump ahead a few stages, to Bargaining or Acceptance, we're still at Denial here. First, we've got to deal with Anger. A business model just died (even if it is just starting to feel the sting), you can't rush these things.

--Dave

[Edward Castronova]

4.

I can't get over the boon to humankind that this represents. Just think: No more toob. I say, let the TV people bring whatever they've got. To the barricades!

[Bruce Boston]

5.

Cha-ching! Can you smell opportunity?

[This year alone it may cost them hundreds of millions of dollars in refunds and rebates to the advertisers]

Advertisers have the money and are not going to say, 'well, we saved some money this year, let's take a break'.

If this marketplace has really gone online then so will these funds. How long until we see marketing firms that specialize in virtual integration? When I was in Japan I worked as a 'Japanologist' helping companies break into that market, wonder if there will be 'Virtualologists' that specialize in helping companies break into virtual markets....

[DivineShadow]

6.

TV execs are businesspeople, not mindless drones heading for the cliff ready to vanish in oblivion, or mortally wounded dogs ready to wage a stigma war. The next logical move in "the war" would not be to surrender and pair up, or attempt to attach a bad image to online games. At least not when you still have the upper hand (way upper) in numbers, the expertise, the muscle and the machinery built.

The salvo against MMORPGs or whatever is taking viewers away will be higher quality shows. The salvo against DVRs is interstitial ads. And a final salvo: I'm sure these guys are actually ahead of me (or us) and already well into planning for the delivery of interactive content. Not games, but interactive shows.

[Dave Rickey]

7.

We're talking about the same guys who have brought us the high-quality fare we already enjoy, yes? I think they really are already doing the best they can.

And their idea of "interactive shows" is American Idol and Big Brother, a gimmick that has hopefully already played itself out.

If the history of competing media (theatre, newspapers, movies, radio, TV) is any guide, the next step in this dance is demonization on a large scale, along with an effort to denigrate and trivialize those that enjoy the games. Actually, we're on that step now, but we can expect the intensity dial to get turned up a few notches.

It's not like TV is a monolithic entity. You name a strategy, someone in the industry will attempt to pursue it once the handwriting is on the wall. Right now we're not on their radar, but the amount of money involved ensures they will run the cause of the loss to ground, and I am pretty certain that finger is going to be pointing at us.

Don't forget that there is a lot more involved in TV than just the people who produce shows and the advertisers. There's multiple layers of management, agents, brokers, and other "ten-percenters", and this shakes the whole edifice. Mankind's first reaction to change is fear, and in some cases that fear will be justified, there won't be places for everyone in the current structure after things shake out.

That doesn't mean TV will go away, any more than any of the earlier conflicts led to the end of their mediums. But it will be very different.

--Dave

[Ian McGee]

8.

What are the comparative magnitudes for the demographics and where we can see them? Are the TV execs talking about 8% of 50million guys, or 5million? And how does that compare to the 500k or so that appear to be in the MMOG arena?

In other words, are we a teaspoon or a bucket in the great bathtub of change?

[Dave Rickey]

9.

The total missing from the male 18-34 viewers demographic is no more than 2.5 million (8% of the 31 US million males in that age bracket according to the US Census Bureau, Nielsen's market measurement should be somewhat smaller but I don't know how much)). Around 2 million people in the US play MMO games (more exact figures aren't available). Nick's demographic survey would indicate around 75% of those are males 18-34 (and I have seen an independant set of figures that would be consistent with his). So, 1.5 million missing young men accounted for.

The figures aren't an exact match, but they are on the same scale of magnitude. And personal as well as anecdotal evidence is that the first thing to be given up for online games is television, especially re-runs. If you were an MMO player who wasn't a sports fan this last month, you haven't had a lot of options (since the networks who didn't have a sports deal went to re-runs rather than compete).

It's not so much the number of players, but the fact that they skew so heavily into one narrow demographic. And that demographic is the crown jewels as far as TV is concerned.

--Dave

[DivineShadow]

10.

What you see today on TV today is exactly the intersection between what captures the greatest target audience at the least cost. A Business. Not a charity. Someone is upping the ante by funneling money into an activity that competes and moves the intersection point.

So lets see. You're sitting at a board meeting, facing a dwindling userbase. The Tamagotchi^2 craze is taking away your users. Users you thought you had locked-in.
As your first action, do you recommend:
a) Improve your services to compete?
b) Bundle your game with the Tamagotchi^2? or
c) Mount a media offensive portraying Tamagotchi^2 as the spawn of evil?

[Dan Hunter]

11.

d) All of the above?

[Dave Rickey]

12.

Me at a board meeting? Perish the thought. There's selling out, and then there's selling your soul.

Anyway, a rational response would be (a) followed by (b). But this isn't just business, this is the entertainment business. TV is one leg of a triad that has defined American culture for the last 50 years. TV defined what was important, made and broke presidents, laid its stamp even onto the language, making "Broadcast English" *the* standard dialect.

Everybody at that table is going to be there because they fought and scratched and clawed their way up. The most powerful people in their industry, some of the most powerful in the world. Rich, powerful, famous people sell their souls to get a few minutes of their time. They are, quite simply, the masters of the universe as they know it. All of a sudden, they're going to be facing the possibility that they are at the wrong table. And you expect them to respond rationally?

--Dave

[Bruce Boston]

13.

Media companies are pretty smart. Disney has been into Nintendo/Gameboy/Internet/etc/etc for years, and its no coincidence that they have toontown now. I think the same could be said of partnerships like MSNBC and a few others.

Media companies know the news well before they give it to us. They also know where their demographic is heading and will be waiting there with open arms wherever it wants to go.

[Dave Rickey]

14.

Perhaps I'm just too confrontational, looking for fights where there aren't any. But it;s interesting that the debate is mostly over how the networks will respond to this, and not whether or not it's actually going that way.

But I still think you guys are giving TV execs way too much credit. There's no sign the networks saw this coming, they certainly wouldn't have let guarantees get written into the contracts if they had.

--Dave

[Edward Castronova]

15.

Agreed that TV's response may be irrational. But among the irrational responses are two that will further speed TV's collapse:
1. Denial
2. Rationalizing

The effects of #1 are easy to see. Number 2 would be: "There's no doubt that games are eating away at our customer base, but this is due to {insert patently false theory of human nature here} that games have temporarily monopolized. Next fall's sitcoms and cop shows will correct all that."

[DivineShadow]

16.

Well guys. I'm reconsidering my own posts here. I've written a number of times (in my ignote blog) on just this kind of situations, where a disruptive technology enters an established market. My very own conclusions so far have been that these people were brain-dead or dinosaurs in denial, yet here I've attempted to project a modicum of scruples and forward-vision to them.
I stand corrected: TV excecs are more likely to follow the likes of the RIAA, SCO Group, DirecTV and others in biting the hand that feeds them in a last-ditch effort to maintain the status-quo, rather than to adapt and grow.

[Dan Hunter]

17.

The correlation between the (Network) TV industry and the RIAA is interesting, though presumably not exact. But if you look at the business strategy of the RIAA it's been rational but probably futile. They seek to erect as many barriers to entry/change as possible in order to (rationally) extend their revenues into the future as long as possible. However they don't have any way of coöpting the P2P beast.

TV has a much better strategic position vis-a-vis MMORPGs than the RIAA has vis-a-vis P2P. The TV industry is not an industry that *cares* about TV, it cares about money (I mean, of course, right? Econ 101. But it's worth stating). So if the assets that TV owns could be better deployed elsewhere (ie make more money invested in another place) then homo economicus will move the assets into that new industry. (I'm gonna ignore *all* transactions costs, path dependencies, and behavioral econ for the moment). So the rational response is, if Dave is right and the 18-34 M demographic is dead to TV, then they transfer the assets devoted to this demographic to the MMORPG industry. They capture the other demographics with TV, and introduce more sophisticated advertising mechanisms within games so as to capture the MMORPG market for payment by gamers and the nascent possibilities for advertising here.

Now, this solution isn't a great one, for all the issues I specifically ignored: they're not gonna be rational, there are significant path dependencies, huge fixed costs (for both the TV and gaming industries), etc etc. But it does lead me to predict that the traditional entertainment conglomerates are going to build or buy game (and especially MMORPG) assets (ie companies), and are probably not going to run stories on suicide-by-EQ. Not a great solution when your corporate holding company owns the game company.

[Bruce Boston]

18.

In any case, this certainly addresses the question that was raised a few weeks ago. 'If men are spending more on MMOGs than what are they spending less on?'

[morninmanx]

19.

While I would love to think that online gaming has become such a mainstream activity that it's eating into network ratings I think the reality is a lot simpler.

"The Case of the Missing Men," as some are calling the odd downturn, could simply be the result of laziness. In this case, it's the laziness of the installers contracted by Arbitron to hook up the set-top monitors that help generate the viewership numbers. The Missing Men also happen to be the demographic most likely to have a large number of wires going into and coming out of their televisions and they really, really want all those wires to work the way they're supposed to. That's not always compatible with the needs of the sampling box, which leads to installers throwing up their arms and viewers asking Arbitron to remove the box a week after it was first installed.

I wouldn't be so quick to discount the impact of DVD's either. The ten hours you spend watching the Indiana Jones boxed set is ten hours of broadcast television you didn't watch. And there's more and more good stuff to watch on disk with every passing day.

Mind you, I think the networks have brought this situation on themselves with lax production standards and too many commercial breaks, but I think MMORPG's are a niche market that won't have a genuine ratings impact in the US for years to come, if ever.

[Dave Rickey]

20.

None of those would be significantly different this year than last (this isn't the first year for using the boxes, as I understand it they've been in use 3-4 years or so). MMO games, on the other hand, have grown 50-70% in the last year, adding around 700,000 new US subscribers, not counting those that have signed up for XBox Live (for which I have no numbers). The only other thing taking young males out of the audience is Iraq, and that is only 150,000, most of them active-duty personnel that wouldn't have been counted by Nielsen to begin with.

The question isn't if the numbers jibe, it's if the logical assumption that gaming time is coming out of TV time holds up. I've been expecting this for years, if the growth of the MMO market continued it was inevitable. If MMO gaming really is competing with TV re-runs and winning, there's no question that it could have this observable effect.

Call it the "Perfect Storm", the networks unknowingly did exactly the right things this year to exagerate the effect. A line-up that didn't have many shows for the demographic, the decision to go to re-runs rather than compete with football and the World Series, and the release of SWG right before the beginning of the season, all conspired to pull the rug out from under their feet.

Like I said, the first stage is Denial.

--Dave

[morninmanx]

21.

I think you're wrong and that I'm right. But you know what? You might be right. And I might be right, too. So my delicate ego feels salved and I don't have to be pissy. There's definitely something weird going on and it just might be games after all. I'm not sure if there's enough evidence to credit MMO's yet, but it looks games overall are definitely having an impact. I'm taking these quotes from an article at:

http://www.broadcastingcable.com/index.asp?layout=story_stocks&promocode=SUPP&articleid=CA330396

Please indulge my ignorance and ignore any awkward formatting.

First off, men might not be cooperating with the sampling technique:

>>
One issue that Nielsen is still investigating is whether some significant portion of the 18-34 sample segment has simply grown tired of taking the time to log in and out properly from the Nielsen People Meter when watching TV. There is some circumstantial evidence suggesting that that could be part of the problem: Among men 18-34 who have been in the ratings panel longer (two years), TV usage levels are down 12% over all in prime time. A source notes that "18-34s are notorious non-cooperators."
>>

Which *seemed* to me to be the most likely explanation. Low sampling levels are the bane of broadcasting, but it normally impacts my field of radio far more than television. Radio relies on paper diaries that have an increasingly low return rate, while television only uses the diary approach during sweeps periods and instead relies on set-top sampling to generate day-to-day numbers. I still think bad sampling is a factor, but here comes the kicker:

>>>
A Nielsen spokeswoman says the data shows a 20% year-to-year increase in the amount of videogame playing by men 18-34. She also said that, within the demo, the younger segment (18-24) is growing faster than the older portion (25-34). Questions remain about how their use of media differs, she said. Nielsen is also trying determine whether younger men are using the Internet more and TV less.
>>>

Now those are some numbers that mean something. The impact might be even bigger than suggested, since some network numbers for men 25-49 have actually gone up while the lower demo tanked.

Speaking of lower age demos, check out the numbers for the 2-17 age group from http://www.centerformediaresearch.com/cfmr_brief.cfm .

My mind is boggled.

[Dave Rickey]

22.

The big unknown here is XBox Live. Talk about competing directly with TV watching, at least with a PC MMO you can do both at the same time. And I finally found some numbers on the XBox: 500,000 as of mid-September (they say "world wide", but until the 17th of October there was only the US service).

http://news.gaminghorizon.com/media/1063811070.html

So that's a 1.2 million increase (assuming little to no overlap, which isn't too much of a stretch) in the last year, and we've accounted for nearly 2.2 million "Missing Young Men" total. The Xbox market skews even more male than MMO's, and a few years younger. And August was when MS started bundling an introductory period with XBox Live enabled games, as I recall....

Add that to the 250K+ of SWG in August, and it looks like a smoking gun to me.

--Dave

[Douglas Galbi]

23.

Ratings data can differ significantly from time use data. A key issue is attention thresholds and engaging in multiple (definitional) activities at the same time. This is likely to be particularly relevant for 18-35 year old males. For some discussion, see sections III.B and C (pp. 14-20) in "Communications Policy, Media Development, and Convergence," available at www.galbithink.org

The relationship between ratings data, advertising spending, and reality is, uhmm, rather complex. In the longer term, that probably provides a helpful incentive for business model diversification.

[Estariel]

24.

Numbers of people playing PC games and console games must vastly outnumber the MMORPG community. Just take a look at the shelves in the game store.

But offline games are not a very responsive vehicle for advertising. Yes, we can get the car companies to pay for their logo to be in the background of the car racing games, but thats a one-time push.

Heres an idea for Sony. Make an EQ server which is free so long as you gain more than 1million (or whatever) XP per month. The catch is that all the zones have product placement and ads all over the place. Those advertisers hungry for this demographic can have all they want.

LOADING: PLEASE WAIT.....AND HERE IS A MESSAGE FROM OUR SPONSORS

[Edward Castronova]

25.

I love it!
"This 50-hour quest mob camp has been brought to you by Coke."

But before we joke too much, this is already happening in games and is going to happen more and more. Yet another reason to encourage game producers to rope off their content from external society.

[Dave Rickey]

26.

That depends on how much of an advance they want to give me....

It is pretty limiting, though, it wouldn't work well in any kind of medieval setting, and could be hard to work into a lot of sci-fi settings (After 15,000 lightyears and 6 centuries, it's still Miller Time).

--Dave

[Bruce Boston]

27.

I can point you to a VW that this does work well in. :)

Also, while advertising can be done in very tasteless ways, when it is done right many people enjoy it. For example; The Super bowl does well, to the point that many people watch it for the ads. Many racing games do it in a way that actually adds value to the experience, as do some movies like 007.

I am not sure that ads in a baseball park, or Nascar track really make the experiences less fun, but I'm sure that there are many that would argue otherwise.

[Michael Chui]

28.

A prime example of enjoyable advertising is.. everything on MTV. =)

[C J Silverio]

29.

Michael Malone of ABC News is thinking along similar lines:

http://www.abcnews.go.com/sections/Business/SiliconInsider/SiliconInsider-1.html

He starts with Counter-strike, because that what his neighbor's kid is playing. Probably he'd be happy to include online games with more persistence in his list of reasons why the young male demographic isn't watching TV.