IGTV: The Golden Age of Terrestrial TV is Never Coming Back

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IGTV: The Golden Age of Terrestrial TV is Never Coming Back

The launch of IGTV, Instagram’s answer to TV for the mobile generation, is another kick in the teeth for traditional broadcasters amid a seismic and irreversible shift in viewing habits and associated advertising dollars.

The arrival of the photo-sharing app on the longform video scene will have YouTube worried, as it represents a direct hit on its user-generated content model, but spare a thought for executives at ad-funded linear channels businesses already struggling to attract younger viewers.

This move gives another 1bn people (Instagram’s monthly user base) even less reason to pick up the remote. These people were already watching 40 per cent less TV than they were five years ago, according to Instagram CEO Kevin Systrom. The decline will only accelerate. This is more bad news for the networks, panicked by the rate of cord-cutting among their existing customers and the increasing likelihood that the next generation of consumers will never have a cord to cut. The networks say they still command the lion’s share of the TV advertising market, but at this rate of decline, there is a limited horizon on that claim. More and more of it is going online.

And there really is only so much time in the day to watch all this stuff. According to EMarketer, the amount of time consumers spend watching video will remain flat into next year, but digital video as a proportion of the overall viewing time will be 40 per cent higher than it was in 2015. Social platforms are stealing audience share and they are fast becoming the new big broadcasters.

You could say the launch of IGTV was a defensive play for Facebook, which bought Instagram for $1bn in 2012, as it suffers from being a relative grown-up in internet terms. While nearly three-quarters of Instagram’s users are aged 13 to 17 years old, only about half of Facebook’s users are. The highest proportion of that demographic are on YouTube.

But, given the amount of video being consumed by its users (up 60% from five years ago), it was an obvious next step for Instagram as it seeks to increase usage time within the app which ultimately will bring in more advertising revenue.

Increased competition among digital platforms is natural as they become more mainstream. It doesn’t change the fact that the golden age of terrestrial TV is never coming back. Video is not yet core to the business models of Facebook, Google and Amazon but it is a growing revenue stream. They have the cash to invest. Facebook’s market capitalisation is more than three times that of AT&T, the largest traditional player in the US. Is it any wonder that there is a rush to consolidate?

Literally the first move by a combined AT&T and Time Warner, just days after the merger, was the roll-out of a streaming service. WatchTV gives customers the ability to watch 30 channels on their mobile devices.

Meanwhile, Instagram’s Systrom is comparing IGTV to ‘real TV’ – it has channels just like the networks, he was keen to point out. As audiences gain critical mass, with the passing of teenage Instagrammers, SnapChatters et al into adulthood, these social platforms will be the new media networks. The question for ‘old TV’ is whether it can change fast enough to keep up.

Ashling O'Connor

Ashling O’Connor is a Partner with SRi who specialises in finding transformational talent for the media, content and entertainment industries, based in London.

For a confidential discussion, contact Ashling directly by email here, or on +44 (0)207 092 6961.