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Why Amazon Wants An Emmy

Emmys weekend is upon us, meaning for the 69th year in a row, millions of Americans will sit in front of their TVs or streaming devices to watch television’s annual tribute to itself.

Television has come an extremely long way in the United States since its first official broadcast in 1928, a three-act play called The Queen’s Messenger. In 1941, the first television advertisement aired for Bulova Watches. The spot was purchased for the bargain price of $9 to $4 in air charges and $5 in station charges. You can watch it below:

That’s was pretty cheap, mostly because not a lot of people were watching television at the time. When that first commercial aired, approximately 0.4 percent of American households had TVs. About 14 years later, though, that had changed dramatically, jumping to 55 percent of American households. By 1960, 84 percent of American households had televisions.

What pushed TV so quickly? The price of receivers fell, but not much during that time frame. The two big drivers were the proliferation of stations able to broadcast a television signal — which went from 16 in the entire U.S. in the late 1940s to 352 by the mid-1950s — and the baby boom.

The sheer volume of children produced in the post-World War period gave early television innovators a brilliant idea: children’s programming. Howdy Doody Time, Bozo the ClownBeany and CecilCaptain Video and Kukla, Fran, and Ollie, were all television station creations beamed out particularly for young children. Parents — especially a generation of harried young mothers — quickly found television made for an excellent assistant when watching all those baby boom kids.

And, for most of that time, three major networks would create the content that was played on those channels: NBC, ABC and CBS.

Netflix would launch decades later and, by 2007, had also introduced television streaming. Six years after that, the streaming service would be nominated for and win its first Emmy for House of Cards, despite never having any of its shows aired on traditional TV.

Amazon actually beat Netflix to the video streaming punch by about six months with its on-demand video streaming offering. In 2015, Amazon also won its first Emmy with Transparent.

Which leads us to today: 24 hours before the annual Emmys.

The average American watches roughly five hours of TV per day. Television advertising was worth $71 billion in 2016 and, if various cultural critics are to be believed, we have apparently been living the golden age of television for nearly 20 years now.

And The Nominees Are…From Streaming Services

A quick scan of the nominees list for the major categories turns up a very notable pattern: It is a good year for streaming services and the original content they produce, but not such a great one for traditional network television. HBO is the notable exception, but HBO also boasts a very popular subscription streaming service in HBOGo. HBO racked up an insane 110 nominations, with Netflix tracking fast on its heels at 93. Hulu, it should be noted, put up 18, and many of those are in major categories like Best Drama, Comedy and Leading Actor/Actress performances.

Amazon held steady at 16 nominations, a situation that reportedly has left Jeff Bezos distinctly unsatisfied with the Amazon Studio Team. He’s leveled a pretty clear mandate about what is expected in the future: bring him Game of Thrones. In response, Amazon’s creative schedule is said to be making some major overhauls with aims at appealing to a more mass market — less Man In The High Castle and more Ray Donovan.

The traditional networks are almost a non-presence in this year’s Emmy nomination list, though NBC has managed to make a stronger showing than CBS, ABC or Fox. Cable channels are also in the race, but that is largely because of HBO’s dominance and status as a mixed streaming-network player.

The war for Emmy dominance is specific, and the hearts and viewing minutes of the American consumer aren’t an idle interest for these players. Amazon’s central command isn’t merely dissatisfied with its Emmy showing because it doesn’t like to lose — though we’re sure it doesn’t like being bypassed by Hulu. Amazon Studios isn’t a sideshow to the company’s main line of business, according to its chief, Roy Price. According to reports, he has recently been tasked with bringing a high-end drama series with global appeal (like Game of Thrones) to Amazon, and soon. Amazon Studies and streaming are critical to the company’s mission.

“The biggest shows make the biggest difference around the world,” Price said. “If you have one of the top five or 10 shows in the marketplace, it means your show is more valuable because it drives conversations and it drives subscriptions. … We’re a mass-market brand. We have a lot of video customers and we need shows that move the needle at a high level.”

The Changing World Of Consumption

Americans watch a lot of video media, but where they watch and how they watch is changing. The basic stats don’t indicate television as we know it has any sort of problem. On average, American adults are watching five hours and four minutes of television per day, and the bulk of it (about 80 percent) is still watched live.

But the people watching that television varies greatly.

Viewers over the age of 50 heavily favor live television and watch approximately 50 hours a week. People in their 20s and early 30s, on the other hand, are watching one to two hours less of live television per week than they were two years ago. People in their mid-30s and 40s are watching about a half hour less live television per week and, in those younger and more valuable advertising demographics, the shift is happening faster and more dramatically each year.

Consistent with that trend is the acceleration of cord-cutting — the practice of switching from traditional cable providers to alternative television streaming providers — a movement which is extremely bad news for cable TV. According to a new report from eMarketer, there will be 22.2 million cord cutters age 18 and older this year — a figure that’s up 33.2 percent over 2016 and represents a sharp uptick from the previous estimate of 15.4 million cord cutters in the U.S. this year.

Also on the rise are cord nevers — consumers who have never, as adults, subscribed to cable or satellite TV. That’s up 5.8 percent this year, taking the total number to 34.4 million U.S. adults in 2017.

Combining those two figures — cord cutters and cord nevers — there will be 56.6 million U.S. non-pay TV viewers this year. By 2021, eMarketer estimates the figure will be up to more than 81 million, or approximately one-third of the U.S. adult population.

That also spells bad news for ad dollars.

Based on those cord-cutting numbers, eMarketer shaved $1 billion off its 2017 ad spend estimate for television advertising, resulting in a projection of nearly flat growth this year over last. Earlier this year, television lost its ad spend crown to digital and desktop advertising. Television’s $71.3 billion in domestic revenues in 2016 was nothing to sneeze at, but it was edged out by digital advertising’s $72.5 billion in ad revenue.

So, what to think of TV as we watch the Emmys this year? There are plenty of people who maintain that, metrics aside, TV  is unrivaled for its reach and ability to simultaneously connect consumers with a message — and it’s not going anywhere.

Of course, when Netflix launched streaming video ten years ago, television’s dominance at producing television programming was quite literally unrivaled as well. Today, Netflix is winning at television — and for that reason.

Just as newspapers learned a decade ago, and retail stores are learning now: Everything is safe from disruption until it isn’t.

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