In 2011, 18-24-year-old Americans were watching about 24 hours a week of traditional television—meaning broadcast or cable TV, whether live or time-shifted with a DVR. By 2016, that number had dropped to about 15 hours a week, according to a report from MarketingCharts.com. In fact, a Deloitte survey found that younger people are now spending more time watching streaming video than TV. The drop is less precipitous for older Americans. But with streaming services now in more than 50% of households, the trajectory for television is clear.
The target audience for the cable network Freeform—formerly known as ABC Family—is viewers aged 14 to 34, so the network is even more susceptible than most to a youth exodus from TV. But that audience also presents additional opportunities. According to a Freeform press release, the network’s programming was the topic of more than 300 million social media posts this past summer, more than any other TV network. In July, during the latest season of the network’s hit show Pretty Little Liars, the Freeform app streamed the most video of any TV network app.
Yale Insights talked to Tom Ascheim ’90, the president of Freeform, and Karey Burke, the network’s executive vice president for programming and development, about what it means to be a TV network in an age of digital disruption.
Q: This is widely regarded as a golden age of television for viewers, with lots of amazing shows to choose from. Is it a good time to be working in television?
Tom Ascheim: It’s a great time to be working in television because there are so many places to get our content in ways there never have been before. It’s also a challenging time to work in television, because the business of finding ways to monetize that content is harder. But it’s not boring, and that makes our day jobs a whole lot more interesting.
Karey Burke: We have to look at the change as exciting. Challenging, yes, but exciting. If you don’t find it exciting, you’re in the wrong business, because it will change again and again, and that’s the nature of modern communication.
Q: How would you summarize the change that we’re going through?
Ascheim: I will summarize it with a really boring statistic. There’s a statistic in television called PUT, which means people using television. It is a remarkably stable statistic—for 30 or 40 years, it never moved. Occasionally, it grew a teeny bit as we added more television channels.
Starting about 2011, it slid, especially for people who were younger, but for everybody. And about half the audience that used to be in the regular measured television universe was gone by 2015. But they’re watching somewhere else. You know, they’re watching Netflix and YouTube. They’re watching in their own way.
People like choice and control. And I think the biggest shift for all of us is that we used to be in control, and now the consumer is in control. And the judo of our lives is finding a way to still give them the stuff that they want to watch, but do it in the way that they want to consume it. It’s a new muscle, but it’s an important one. As Karey said, it’s exciting to try to figure out new challenges, but it’s definitely stimulating.
Q: ABC Family became Freeform earlier this year. What does the name change reflect? What’s the importance of an identity for a cable network?
Ascheim: ABC Family was around for a long time as a cable channel. It started as something actually aimed at families, which is why the name made a lot of sense, and it was the Family Channel, and Fox Family, and ABC Family. And about a dozen years ago, the people who ran ABC Family discovered there was a gap in the market for young adults, people from high school to 30 or so. And there was a show called Secret Life of the American Teenager that was really popular, and slowly, over time, ABC Family became enormously popular with young people. It became the number one network with young people. It was a great thing.
In television brands, you want harmony between the name of your channel, the content you make, and the audience you serve. And we had two out of three. We had a really happy audience that really loved our shows, but when you’re, as we colloquially say, between your first kiss and your first kid on the journey from childhood to adulthood, it’s a time in your life you’re least involved with family. We had a moniker that yelled “safe,” and it’s the time in your life when you’re interested in pushing boundaries and finding things that are interesting and new and perhaps not so safe.
So we wanted a name that opened up our enterprise to people who might have been a little bit turned off by what “family” might promise. We want more consistency with what we make and what we do. It lets Karey have more freedom to make shows that serve the audience in the way they want to be served. And hopefully, we get that harmony. We’ll see what happens.
Burke: It also speaks to literally freedom of form in terms of how we deliver shows. We just launched yesterday our first original short form series on our app. Because the content can’t be separated into discrete boxes for YouTube and SnapChat Discover channels and the other places that our audience is receiving content. So it allows us to experiment with how we deliver, and not just what we’re delivering.
Q: Early in the history of cable, there were a lot of niche channels, but over time a lot of those channels moved toward more similar programming, particularly reality programming. Is it economically viable to be niche?
Ascheim: I think that when cable was very new it was important to really signal loudly why the vertical channels that were launched were different. And so MTV, Music Television, was actually about music. And Discovery was all documentaries. It was very clear, and I think consumers really understood what was different. It was a radical notion a long time ago that we would have 24 hours of news or 24 hours of children’s programming or 24 hours of anything. It felt truly odd.
That had to be proven by doing, and I think people said, oh, this actually works out pretty well. I can find news whenever I want it, or children’s programming, or whatever it is. And then time went by, and the economics of trying to find the most successful shows and the most popular shows started to mush some of the definitions, particularly non-scripted television, of what success was. And I think everyone started chasing some similar stuff. Brand identities got fuzzy, and I think ratings stalled for a bunch of people.
What’s interesting right now is when you talk to people who work at a lot of the cable channels that got mushy, they’re going back to their roots. History is talking all about putting the history back into the History Channel. And A&E is trying to find the part of their soul that is related to the arts. And Discovery has really recommitted to groundbreaking documentaries.
So I think there was a natural formation and over-explosion as people segmented it back to something that feels differentiated again, because without differentiation in a very, very crowded marketplace, it’s hard to make your business go. So it feels like a life cycle issue.
Burke: A lot of niche channels are thriving and surviving. Adult Swim. HGTV is still doing extremely well. And I think, yes, the trend towards generalization hurt companies, and we saw some channels fall away, and now they’re either claiming or reclaiming stronger points of view in order to break out in this era of peak TV, as we call it. So I think we’ll continue to see that movement back towards differentiation.
Q: Do you have a process, Karey, where you are balancing whether a program fits into your niche and its raw ability to attract people?
Burke: Yes, we have filters that we innately look for in the programs that we buy. We spend a lot of time asking ourselves what makes a show Freeform. What differentiates us? And then we really look for shows to develop that fit within the parameters of that.
That said, there’s a wide range within that definition of the kinds of things we believe we can do. A multi-camera comedy and a scripted genre drama we find have can have similar themes about the challenges young people face, and becoming an adult, and finding kinship and friendship and relationships in the modern age for young adults. All those themes seem to be present in all the shows we gravitate towards.
And then we occasionally find one that is deeply tempting, that feels like it is outside, but a big swing for us, and we’ll occasionally reach for that, and have been sometimes successful. But mostly we’re more successful when we know what we’re looking for, and we find it and we nurture it and stay with it, and stay within our lane.
Ascheim: You know, people like to find themselves on TV. That’s why it is great to see a more diverse set of faces all over television. As the population changes, people are looking for themselves. Our audience is high school to 30, so we almost always have protagonists who are from that age group. But then you can tell almost any kind of story. You can use any kind of format. And we have lots of other people around that protagonist, but the center of the show is always someone who’s in our age cohort.
Q: There’s a limited number of channels that a cable system can carry. What are the effects of that limited space on the economics of TV? Is there an effect on the programming because you have this limited number of lanes?
Ascheim: If you’re a lucky person who has one of the lanes, it’s been a good place to live for a long time, because there’s a barrier to entry for people who want to bring content to the audience. And so for a long time, cable channels, and broadcast channels, have been able to be a gateway between people who make programming and the audience.
I think as places like Netflix and YouTube develop, some of those lanes are getting a little mushier, and it’s easier for people to find audiences different ways. And I think that’s part of the competitive dynamic that’s really shifted.
If you were a person who wanted to launch a cable channel, that was very hard. That was an economically unpalatable option for a lot of people, and took tremendous resources, because there’s a certain amount of bandwidth that’s available, and at some point marginally adding another channel becomes expensive for the operator, and not necessarily attracting any more consumers. So they make it difficult.
If you’re an entrenched cable channel, that was a good place to be. It’s a little less of a barrier to entry than it used to be, and I think that’s part of what we’re playing with as we think about developing non-linear places for people to watch our shows, too.
Q: TV can be delivered in a lot of different ways. Is there a tipping point where the cable system is no longer the default, and then things change even more?
Burke: I think we’re at that tipping point.
Ascheim: I’m not sure we quite know what the real tipping point is. It’s very clear that people are having more options than they used to have, and how they bundle their content. There’s an interesting statistic about Netflix: about 85% of the programming that people watch on Netflix at the moment is not Netflix shows. It’s other people’s shows—our shows and all of our competitors’ shows. People like a good bundle. It’s one of the efficient ways to get lots of content that you love.
I think what’s in debate for consumers at the moment is not I hate cable or I must have SVOD services—that is, subscription video on demand like Netflix and Hulu and Amazon—because somehow they’re just the best thing ever. It’s that they’re very effective and they’re very cheap, relatively speaking.
And I think over time, the cable universe is going to look a little more like Netflix. SVOD services are starting to get launched from places like Comcast, and so they’re merging a little bit more than they were a year ago. I think as we look out at our future, we imagine some of the features that are in SVOD services are going to be in our expanded sense of what a network means.
We are launching a show this January where we’re making all the episodes available the day we launch it, so it’s binge-able, so that the control goes back to the consumer, not just to us [Beyond launched on January 2 on Freeform]. Assuming that works, we’ll be doing a lot more of that, because we want to meet people where they are.
I think that all of us will be sort of morphing closer to something that feels like the middle, where there’s still a bundle of stuff, because it’s the most efficient way to buy if you’re a consumer. It might be a little smaller, and it’s going to have some more features. But I think it will still contain an awful lot of the content they already love.