As media conglomerates led by Warner Bros. Discovery conduct terrorized, ashen-faced retreats from the free-flowing red ink of the Streaming Wars, they should keep this in mind: Linear will provide them no safe quarterly shelter. 

The latest distillation of 2021-22 primetime average audiences by major broadcast and cable networks, assembled by Nielsen and blasted out to social Wednesday night by LightShed Partners, lays it pretty bare. 

NBC, which saw its average primetime audience decline by a whopping 7% year over year, won the 2021-22 TV season averaging 5.148 million viewers in primetime, narrowly surpassing CBS, which lost 8% of its watchers and averaged 5.144 million souls. 

Fox finished fourth among the Big Four broadcast webs losing 14% of its audience -- no doubt in part because it lost NFL "Thursday Night Football" to Amazon. 

ESPN, until now, the lynchpin of the pay TV ecosystem, lost 14% of its primetime viewers. 

And as LightShed's Rich Greenfield pointed out, TNT lost 12% of its average primetime aud, affirming WBD's stated reluctance to charge into an NBA licensing renewal. 

Oh, and Fox News was essentially the only major linear network that managed to come close to flat year over year.

Let that cheer you up. 

Even more disturbing has been linear's erosion in its most key audience demographic, adults 18-49. NBC won that arena, too, despite a 13% year-over-year decline.

Viamedia, an independent ad company serving local cable operators, said it launched its Parity Ads Platform, which simultaneously inserts regionally targeted ads on linear streams to match local commercials appearing on cable. 

The platform is designed to help local operators take advantage of the growth of CTV in their markets.

"Our new Parity Ads Platform is one of the industry's first transitional approaches and introduces the immediate next step to achieving fully dynamic advertising," said David Solomon, president & CEO at Viamedia. "This presents an enormous opportunity for our MVPD partners around the country to essentially turn their linear inventory into connected TV inventory, all while better serving their local communities, businesses and advertisers."

Viamedia’s Parity Ads Platform enables MVPDs to regionalize streaming distribution by inserting regionally targeted ads on linear streams which mirror the ads running on traditional SD and HD channels. Viamedia sees the Parity Ads Platform as transitional approach convergence. The platform is designed to help accelerate time-to-market and to reduce technological risks associated with transitioning linear into digital streams.

“The industry is beginning to catch on to the benefits of a parity approach. As subscribers are transitioned to streaming, there's often not enough impressions to sell independently. By replicating the same ad on two platforms, MVPDs are able to optimize linear and CTV feeds for advertisers, maximizing inventory and ad sales during the migration. This system is specifically developed to drive greater demand and value for existing advertising inventory,” Solomon said. ■

Streaming services captured half of the top 10 spots in Solutions Research Group’s 14th annual “Must Keep TV” report, with Netflix capturing the top spot for the second consecutive year and streamers like Amazon Prime Video, Hulu, Disney Plus and HBO Max rounding out the list.

SRG based its research on 1,400 interviews conducted in May with consumers aged 12 and older.

Broadcaster ABC took the No. 2 spot for the second year in a row, followed by CBS, which also placed third last year. Amazon Prime Video rose from No. 6 in 2020 to the fourth spot this year, while NBC placed fifth, one spot lower than last year. Hulu moved up a place to No. 6 and Fox slipped to No. 7 from fifth place.

Disney Plus had the largest gain, vaulting from No. 13 in 2020 to No. 8 this year. Newcomer HBO Max (which launched on May 27)  placed ninth and ESPN finished tenth, two spots lower than its eighth palace showing last year.

Streamers also had strong showings throughout the rankings. NBCUniversal’s Peacock, launched nationwide last July, entered the rankings at No. 29 and Apple TV Plus finished at No. 33.  ViacomCBS’s Paramount Plus, which debuted in March, entered  at  No. 37.

According to SRG, TV brands that showed momentum in 2021 included History (up three spots to No. 12), HGTV (up three spots to No. 13), Comedy Central (which finished at No. 19, the first time it has cracked the top 20 since 2015) and Hallmark, which has steadily moved up the rankings since 2016 and finished 2021 at No. 20.

HBO Max’s success may have come at the expense of its linear brother, HBO. According to SRG, the HBO linear channel slipped to No. 25 in 2021 from No. 12 last year. 

And though 2021 was Netflix’s second year at the top of the overall Must Keep TV mountain, it has been tops among viewers aged 18-to-34 for five straight years, according to SRG. Streamers took four of the top 5 spots in that demographic, while among men aged 18-49 Netflix and Amazon Prime took the top two slots, with ABC being the most popular broadcaster and ESPN was the top cable network.

Across other demos, women favored Netflix, Amazon Prime Video and Hulu (Nos. 1, 2 and 3), while the top three for African-Americans were Netflix, ABC and Amazon Prime Video. Latinx consumers saw Netflix, Amazon Prime Video and ABC as their top three Must-Keep TV services. 

While streamers dominated the list, broadcast networks weren’t totally left out, but their grip is slipping. About 62% of those interviewed by SRG included at least one of the Big Four networks (ABC, CBS, NBC and Fox) on their Must See TV list in 2021. That ‘s down 15 points from the 77% that had at least one of the Big Four on their list 10 years ago.    

Meanwhile, streamers continue to gain ground. According to SRG, the top four streamers — Netflix, Hulu, Amazon Prime Video and Disney Plus — were seen as must-keep for 65% of those interviewed in 2021. Broadcast networks remained strong with older viewers, as 78% of respondents aged 50 or older identify at least one of the broadcast nets as a ”must keep“ vs. 47% for one of the top four streamers.

 A+E Networks says it continues to mine the traditional linear cable platform, bucking the trend of media companies diving into the emerging subscription video on demand (SVOD) pool.

With SVOD services such as Discovery Plus, Disney Plus, HBO Max and the soon to launch Paramount Plus (currently CBS All-Access) offering new, original programming in an effort to court a growing digital viewer base, A+E Networks is looking to super serve targeted cable viewers as well as to cultivate advertising revenue on the struggling but still formidable traditional linear cable platform, senior executives at the programmer say.

Also Read: Report: Pay-TV to Lose Most Subscribers Ever in 2020

“As more and more media companies put their resources behind their own streaming services, our number one priority is creating the best possible content pipeline and programming for consumers and partners across all platforms,” A+E Networks group president Paul Buccieri told Multichannel News. “This includes our linear networks which, of course, remain a huge priority.”

A+E Networks linear channels History, Lifetime and A&E in 2020 finished among the top 20 most-watched cable networks in primetime, propelled by several popular, unscripted series and scripted movies, including Lifetime's Married at First Sight and History’s The Curse of Oak Island, according to Nielsen.

On the scripted front, Lifetime continues to delve into original scripted fare with the rollout of new original movies, including bio films on the lives of television personality Wendy Williams and gospel legend Mahalia Jackson

“Every year, we create over 1,400 hours of fresh premium content for our portfolio and the ecosystem; and we remain laser-focused on adding more,” added Buccieri. “Our relationships with distribution partners are essential to us – and we are energized and inspired by the variety of ways we can collaborate to bring our shared consumers best-in-class content from the brands they love and trust.”

A+E Networks programming president Rob Sharenow spoke about the company’s linear business strategy to Multichannel News. An edited version of the interview appears below.

Why do you feel that the A+E Networks commitment to linear gives the company an advantage in reaching viewers?

I do think we distinguish ourselves as a portfolio because of our commitment to linear.  We have an incredible depth and breadth of upcoming stuff that is premiering on linear brands and have one of the most robust offerings of original content. We have 1,400 hours planned of original content between our brands that’s going to be premiering on linear, which is really something we take a lot of pride in.

Does it concern you that your networks' competitors are potentially reaching new viewers and cord cutters on the digital front with their respective SVOD services?

Clearly we're in a moment of disruption. For us, we really value our linear ecosystem -- that’s where a huge portion of our bread is buttered. We are really pleased with our linear audiences and our brands. As to what our competitors are doing in the streaming world, I do think there is obviously a shifting landscape, and clearly we have done library deals with some [streaming] companies. It really shows the strength of our content that it is so desired by a lot of our direct competitors and that they want to be in business with us in that way. 

Where do you see the upside in the linear business going forward?

I think broadcasting in general still works, and we have a big, ad-supported model that is very lucrative for us. A lot of our advertising clients like to have scale delivered at a certain time and in certain ways. That’s something that linear does do better than any other platform. Viewers binging content whenever they want doesn't serve the purposes of a lot of people in the advertising community. I also still believe there is incredible value in the communal experience for viewers. I think we have brands that feature must-watch shows that people like to watch live through a linear experience, like [History’s] The Curse of Oak Island and like [Lifetime’s] Married At First Sight. These are shows that are still getting big [ratings] numbers because there is something to the community of viewership that can't be replicated on another platform. There’s something very special about a show that everyone's watching at the same time.

How have you been able to maintain strong advertising revenue in a declining cable subscriber marketplace?

The market right now from what I hear is very good. I think COVID and the economy have affected everyone and everything including the ad market, but in general right now we're experiencing what I see to be a very strong market. I think there is something that linear provides advertisers that they really can't get anywhere else. It’s about audience scale and the sense of timing that’s really unique to the linear experience.

Would you consider a digital SVOD service in the future?

We have some really successful, direct to consumer products that are relatively new. We have Lifetime Movie Club (subscription price $3.99 per month), which super serves the Lifetime movie viewer. We have the History Vault ($4.99 per month), which has an incredible depth of the history library available, and we also have Crime Central ($4.99 per month.) So we do have products in that space that are doing very well and growing. I think we have to be very strategic and targeted about how we're approaching those businesses. Those are two examples of how we've managed to swim with the giants because those are the really targeted opportunities that are working for us.

Rapid changes in consumer behavior have focused the industry on Connected TV. That’s great! But the new conventional wisdom assumes convergence is simply the adoption of CTV and that’s false. Last year, 15 percent of the TV ad spend went toward a combination of CTV and addressable and programmatic TV, while the remaining 85 percent went to linear, according to eMarketer. By 2022, the same data shows that linear will still account for 50% of advertising spend, with 36% going to CTV, and 14% to addressable and programmatic TV. 

Consequently, for advertisers the opportunity is not about waiting for all TV to become connected, it’s about recognizing that their audiences are increasingly fragmented across multiple devices and channels. 

The challenge for the industry is to create a new paradigm that incorporates the various fragmented types of video into a single, converged model. Here’s how.

Step One: Activate On Cross-Channel Video Measurement

The convergence conversation has centered around technology. But as a recent Forrester report makes clear the core technology and measurement obstacles have finally been overcome within the past year. Cross-channel audience-based tools that combine both upfront auction-based transactions, as well as programmatic, are now a reality. Likewise, cross-channel measurement has become incredibly sophisticated within the last year. It’s time to activate these capabilities.

Step Two: See The Challenge in Operational Terms

With the necessary technology largely in place, the industry’s primary challenge is now operational. We need to break down silos at agencies and brands between linear, CTV and digital in order to do efficient planning across a fragmented space. By accepting that CTV won’t automatically bring about convergence, we’re actually laying the mental framework to break down the silos because we can no longer assume that digital teams will replace their linear counterparts. Instead, we need to plan for a future where all teams have a seat at the same table and are therefore aligned around the audience, not divided by silos. 

Of course, making operational changes will vary from one stakeholder to the next.

For the agency, a key next step will be to make sure your tech stack can measure across your existing digital and linear buys. At the same time, the agency must get its investment and trading teams to examine the shared measurement of strategic audiences.

For brands, it’s important to verify that your agency (or in-house team) can activate beyond CTV. Equally important, brands need to make sure that their DMP can utilize TV panel data to tie converged measurement to KPIs. And if your brand is heavy in TV, you need to negotiate your upfront buys for flexibility between linear and digital.    

Broadcasters must build capability around using an advertiser’s first-party data to understand their customer’s audience objectives. At the same time, broadcasters should be prepared to provide greater flexibility of upfront spending commitments between linear and digital. Finally, broadcasters must continue to expand their practice of using technology to enable data-driven packages across all devices.

Step Three: Lead a Generational Shift in Programmatic

Programmatic has a long history, but it has become shorthand for the tools and processes needed to manage auction-based buying. Extending programmatic to television, both connected and linear, will bring us to a place where advertisers can reach one audience everywhere. But we have to acknowledge that television and digital are fundamentally different animals. Consider three key categories:

We can achieve convergence, but we need to recognize that the scope of the challenge requires a new generation of ad tech that reconciles those fundamental differences. But instead of thinking about how we can make TV more like programmatic, we need to look for ways to make programmatic (a little bit) more like TV.

Streaming services have revolutionized how we watch TV and consume content. We watch when we want, where we want, and with no restrictions. We can get through an entire season of a series if we choose to do so, in most instances. There are no Nielsen ratings to dictate what is popular…and what is not. And we all have a voice thanks to social media. But, even in this sea of change, there is one constant, the value of which will never change…original content.

As always, and on any outlet (linear or digital), it is the content that separates one platform from the next.

Naturally, there is no denying the impact outlets like Netflix, Amazon and Hulu have made in the original scripted drama and sitcom departments, which is a path other recent and upcoming streamers are taking. The list of quality entries keeps growing. The critics have taken notice. And the absence of HBO’s Game of Thrones on the Emmy ballot this summer means these streamers are poised to dominate.

Last fall, HBO scored 34 wins at the Primetime Emmys (with 12 bestowed on Game of Thrones), followed by Netflix at 27 and Amazon at 15. The top-honored broadcast network, in contrast, was NBC with just 7 wins (a result of granddaddy Saturday Night Live).

“I remember when cable was the place to go for cutting-edge, trendy and creatively different series,” said media analyst Brad Adgate. “Now, these streamers are stealing that thunder in the comedy and drama departments, both in regularly scheduled series and in the movies and miniseries areas. I wonder what other genres they will tackle next.”

Unlike the streamers and cable, which have no necessary guidelines, the Big 3 broadcast networks operate via a variety of dayparts. Primetime, of course, is the most widely seen block of programming each day. Network news, both in the morning and the evening, remains a key financial ingredient. Late night is a haven for talk shows, another potential cash cow. And, as network audiences for all dayparts continue to deteriorate in this record era of content platforms and individual series, sports is the one consistent.

“Digital makes you the programmer of sorts, where you can pick and choose when you want and not just on a TV screen,” noted Adgate. “But when it comes to a live event, sports in particular, you just don’t get the same impact on a mobile device. Can you imagine over 100-million viewers tuning in to watch the Super Bowl on their phones? Or really any sporting event?”

“I don’t imagine these streamers will tap into the network sports audience anytime soon,” he added.

News or Talk As a Streaming Option  

“Sports programming shows no signs of wear and tear on the broadcasters,” said Rob Russo, founder and president of RNR Media. “But I just don’t see a talk show of a topical nature on a digital platform, like Jimmy Fallon or Jimmy Kimmel, because of the day to day topicality. Has anyone, after all, heard anything about David Letterman’s talk show on Netflix? I presume it was a failure, wasn’t it?”

Letterman appeared on the streamer in My Next Guest Needs No Introduction with David Letterman, which featured an interview with one guest per show. The second season premiered on May 31, 2019.

“Amazon and Hulu are trying to get in the live sports category, particularly NFL football on Amazon,” said Russo. “But the point of what makes money for the traditional cable and broadcasters, whether it is local or network, is the news divisions. And that’s another area that these streamers really cannot compete in because they would need a live show every day at a certain time, which is not their model. The beauty of the subscription model is the ability to watch anytime you want, and news does not work that way.”

“I think the bread and butter on digital are these regular scripted series, which outlets like Netflix, Amazon and Hulu have done a great job with,” he added. “But the competition continues to grow. There is more competition than ever before.

Dave Morgan, founder and CEO of Simulmedia, suggests another category for streaming services that could work: console gaming companies.

“Those products are increasingly going ‘free to play,’ supported by user-fees,” he said. “You can imagine them moving to bundled, subscription services supported by both user fees and advertising. And that could be another area to focus on in the future digitally.”

The video version of Condé Nast’s Bon Appetit is going linear, with a 24 hour a day channel launching Wednesday on the Samsung TV Plus platform.

Bon Appetit video programming has been available on demand on YouTube and other platforms and a free over-the-top channel with three original TV-length series was launched in February.

Programming on the Bon Appetit channel will include a special episode of Making Perfect with the whole test kitchen staff collaborating on a Thanksgiving meal.

Test kitchen chefs for 'Bon Appetit'

Other programming on the channel includes Gourmet Makes with Claire Saffitz, It’s Alive with Brad Leone, Reverse Engineering with Chris Morocco and Almost Every with Amiel Stanek.

Bon Appetit programming has generated more than 1 billion views across all platforms so far this year, up 19%. It has more than 4.7 million subscribers on YouTube, where viewers spent more than 2 billion minutes watching Gourmet Makes.

Samsung TV Plus is pre-installed on all Samsung sets make between 2016 and 2019. It delivers free, ad supported TV to users with an internet connection.

Convulsed by a virulent Digital Disruption, the Ecosystem is an ominous environment, and its inhabitants are afraid — very afraid.

No, that’s not the opening line of a creative pitch to studio Netflix for a binge-watchable original sci-fi series. As the tectonic shift to an Internet-centered, post-linear age in television advances, a real, truly anxious mood is settling over the pay TV ecosystem that media, communications and technology companies tensely cohabit.

Since the turn of the century, eight of every 10 homes has connected to the broadband Internet, enabling the disruptive rise of streaming video from pioneering Netflix and empowering a millennial vanguard of cord-shavers, cord-cutters and cord-nevers.

The uneasy mood began to really sharpen late last year, as the shift from linear TV produced a series of jarring developments on the regulatory front and in the mainstream attractiveness of OTT.

No ecosystem CEOs worth their $30 million-minimum pay will admit to it, but buffeted by change, some are feeling the chill of fear.

PLENTY TO FEAR

Not that fear isn’t rational, least of all to the lords of the digital jungle — cable operators. The Federal Communications Commission is on the verge of turning broadband into a regulated utility, a policy shift that President Obama urged in November. Alarmed by the possibility of becoming the first broadband-utility colossus, industry leader Comcast recently signaled it could walk away from a year-old, $45 billion proposal to absorb No. 2 Time Warner Cable.

In a report just last week, influential cable analyst Craig Moffett argued the FCC would use its new powers to regulate broadband pricing, crimping cable stocks.

In October, HBO went over-the-top. Pay television’s leading premium channel and change agent is aiming to reach the 10 million and rising broadband-only consumers who shun linear pay TV. CBS followed HBO’s lead a day later, introducing CBS All Access. Others have followed, and more are in the pipeline.

Then this seismic jolt in January: Disney’s ESPN, basic cable’s stickiest and most expensive network, joined the lineup of Sling TV, an upstart over-the-top offering from satellite TV provider Dish Network.

HBO and ESPN “are the two pillars of pay TV,” said Bob Bowman, CEO of Major League Baseball Advanced Media, which operates the pioneering subscription video-streaming service MLB.tv. “They have correctly determined that they need to explore options as we sit in a new world with a different generation.”

Might the ecosystem be witnessing the first meaningful sign that the cable bundle — a linchpin of television economics for two decades — is fraying? If cable’s two marquee networks are connecting directly to viewers over the Internet, Bowman said, “then I think every media company in the world has to do it.” Not everyone believes that would be positive for the ecosystem. Blared the headline on one analyst report: “An OTT Free-For-All Would Be a Mad, Mad, Mad World.”

Once the original disruptors, cable operators and programmers after two decades of booming stock growth are acutely experiencing the unsettling impact of digital disruption, a circumstance long and harshly familiar to print media and the music industry.

Indeed, every inhabitant of the television ecosystem — MVPDs, ISPs, OTTs, programmers, audience trackers, media conglomerates — sees something in this roiling period of change to fear.

There’s frothy uncertainty surrounding disruption in advertising, due to factors ranging from anachronistic audience-measurement tools to the fickle tastes of a demo whose biggest life decision at the moment is gum flavor. Even the tiniest misstep or unforeseen event can bring big peril.

A star can retire, robbing a programming giant of leverage needed in carriage talks. Think Viacom: It was already under a cloud over its programming prospects when Jon Stewart on Feb. 10 announced his leave-taking from Comedy Central’s The Daily Show With Jon Stewart sometime later this year.

For programmers, the shift to post-linear TV boils down to a stark choice: adapt or dwindle further faster. Fully-distributed networks are less fully-distributed already. As millennials cut cords to hopscotch among IP devices to watch video, cable operators are dropping lesser-watched channels. As a result, affiliate fees have slipped by a single-digit percent in two years, analysts estimate.

According to new Nielsen data, millennials are fleeing linear-TV during the current TV season at twice the pace of past years — dropping by 10.6 million from September 2014 to January.

“The change in behavior is stunning. The use of streaming and smartphones just year-on-year is double-digit increases,” Alan Wurtzel, NBCUniversal’s audience research chief, told The New York Post. “I’ve never seen that kind of change in behavior.”

Overall, primetime viewers have fled broadcast television for two straight years, down a total 12%, while cable lost 7% of its audience last year. In tandem, television advertising dropped. How much and when, if ever, will it fully recover? How much more of it will shift to IP devices? Which of their networks must content owners protect at all cost? Which are expendable? These are cold-sweat questions that content companies are asking now.

Worse, in this Golden Age of Television, programmers are drowning in quality programming, as content companies go all out to lure and retain audiences who now have a world of choices. Every network or website or movie service seems to own a tentpole series or two — the motion picture model leaping to television. Programmers may look forward to some expensive flops. (It is however, a good time for viewers, who can binge, time-shift or sprawl in front of linear TV.)

Meanwhile, competition is surfacing everywhere. Google, the gargantuan of online advertising, is installing Google Fiber, its own turbo-speed broadband service, in major cities, pressuring cable broadband to play catch-up. Now, with Verizon in its crosshairs, Google also is reportedly poised to introduce its own wireless service, leasing the networks of Verizon rivals Sprint and T-Mobile.

Google’s intent: To drive down data-plan pricing. Lower prices could spark a boom in data usage, gaining greater consumer exposure to ads on Google. Not only could pricing disruptions potentially harm Verizon’s core business. At the same time, Google’s move also may complicate Verizon’s strategy to dominate mobile video and wrest a chunk of the online ad market now dominated by the search giant.

“There’s a fear of the unknown,” said Edward Bleier, a senior industry consultant and the retired executive who ran the Warner Bros. pay TV division in the 1980s and 1990s. “No one can analyze the changing developments and feel fairly confident that they are right — the fear is not being sure you have the right take on what will happen.”

For years, digital disruption risks have been spelled out in clear language in many annual reports, including 21st Century Fox’s: Digital technology and “enhanced Internet capabilities and other new media may reduce television viewership, the demand for DVDs and Blu-rays and the desire to see motion pictures in theaters. Failure to effectively anticipate or adapt to emerging technologies or changes in consumer behavior could have an adverse effect on our business.”

Yet the company still hasn’t figured out how to extract full value from online viewing of the company’s content. “We’ve got to catch up … in our ability to figure how we monetize and capture the value inherit in that viewership,” 21st Century Fox chairman and CEO Rupert Murdoch acknowledged during last year’s third-quarter earnings call.

‘EVERYWHERE’ GETS NOWHERE

History shows that incumbents really don’t react to disruptive products and services until it’s too late. That’s because either the market is too small or there’s a risk of cannibalizing one’s own business.

Liberty Media chairman John Malone, one of cable’s most seasoned and successful investors, has subtly chastised U.S. cable operators and programmers for not getting TV Everywhere together fast enough. “The cable industry has been very slow [which has] created a window of opportunity to the over the top guys,” he told Reuters, referring to Internet-delivered TV services such as Netflix.

Bolstering the point in an earnings call last week with analysts, Discovery Communications CEO David Zaslav warned that further delay of TV Everywhere by cable would force programmers to go OTT. “It will require all of us to go directly to the consumer, because the cable guys aren’t getting it done,” he said.

In addresses to investment analysts, Time Warner CEO Jeff Bewkes has cited a tendency by media executives to avoid being a first mover because of the risk of embarrassment. In contrast, he explained, Time Warner has moved decisively to exploit its content inside the ecosystem (on pay TV and as a supplier to broadcasters) and outside (over the Internet).

“The more options you give audiences to access video content, the greater the consumption,” Bewkes told one Wall Street gathering. “Rather than merely shifting share from one platform to another, we continue to see growth in the video universe, and that’s why we’re convinced we can effectively pursue growth in both areas.”

Time Warner’s Bewkes knows a thing or two about digital disruption and may be one of the ecosystem’s braver CEOs, having survived the corporate near-death experience of the Time Warner- AOL combination.

At Disney, fear of the consequences of inaction spurred the company to be a first mover in embracing Internet video. Also credit Disney chairman and CEO Robert Iger, who forged close ties with the late Steve Jobs of Apple. Jobs was Disney’s largest single shareholder as a result of selling Pixar Animation to the media giant. Talk about a model relationship. Together, Iger and Jobs virtually jump-started the 2.0 digital revolution by jointly introducing Apple’s paradigm-shifting video iPod with $1.99 Disney-owned TV hits at iTunes. Iger’s peers privately scoffed and accused him of harming television revenue streams.

It shouldn’t be surprising that TV executives would scoff at the notion that they are fearful, particularly based on the last few years of stock performance. And gauging the true mood of an industry at its inflection point is tricky business. In the mid-1990s, who knew DVDs would supplant videocassettes, ushering in an unprecedented period of bottom-line enrichment and value-creation in Hollywood? But divided into warring format factions, Hollywood certainly wasn’t initially in the buoyant mood that prevailed when the DVD gusher materialized.

In 2000, major music labels did recognize the existential threat of Napster. Still, it was too late to gain command of the disruptive forces Napster unleashed, and the music industry will never be the same. Then there’s the risk of misinterpreting a true shift. When AOL acquired Time Warner in 2000, the combination was hailed as fully realized convergence. In truth, the monumentally ill-fated transaction marked the bust of Internet 1.0.

If any player recognizes a tectonic shift, it’s HBO. Expanding the premium channel’s audience beyond cable “is the most exciting inflection point in HBO history,” CEO Richard Plepler declared in announcing cable-untethered HBO. “Just the threat of going over-the-top gives us additional leverage.”

How might streaming HBO impact Comcast, Verizon, DirecTV and the rest of the herd of pay TV giants? A recent Parks Associates survey found that 17% of U.S. households likely would subscribe to the standalone streaming network. Of the respondents planning to subscribe, half indicated they would drop pay TV for HBO over-the-top.

The mood of pay TV and broadcast executives would brighten considerably with audience-tracking tools suited to post-linear TV. If there’s one consensus in the ecosystem, it is that viewership isn’t measured across the universe of platforms and digital devices. The vast majority of the missing viewers are apparently millennials.

Not surprisingly, Nielsen, the dominant TV ratings service, catches plenty of flack. The ecosystem took note in January when CNBC suddenly dumped Nielsen and hired a little-known obscure market researcher, Cogent Reports, to track its daytime audiences.

“If you counted all the viewing that we know that’s not counted the traditional way” by Nielsen for The CW network, “it’s up 10%” from reported ratings, Bewkes of Time Warner, part owner of the network, recently told Wall Street analysts. Alluding to time-shifted viewing and OTT audiences, CBS CEO Leslie Moonves (the other part owner of The CW) has declared Nielsen’s overnight ratings as “basically worthless.”

But broader, more-accurate audience tracking won’t necessarily restore confidence. In fact, media executives will face decisions fraught with risk of economic miscalculation. Should they charge advertisers more to reach young-skewing mobile and digital-device audiences, a coveted demo whose preferred platforms are more dynamic? Would advertisers, in turn, give a haircut to ad rates for older-skewing linear-TV audiences? Or should the various ratings be rolled into one, with advertising rates reflecting the quality of the overall audience?

It’s an “issue that realistically we are very much in the midst of evaluating and analyzing,” 21st Century Fox chief operating officer Chase Carey said on a recent quarterly earnings call with analysts.

THINKING AHEAD

With indications that the cable bundle could come under greater pressure, media companies must swiftly begin contingency planning. For two decades now, pay TV has expanded its bundles and justified annual rate hikes of 4% to 5% by citing the surging number of channels. Per Nielsen, the average pay TV household has 190 channels, only 14, 15 or 17 of which are watched regularly in any given home. Meanwhile, the average monthly cable bill of about $64.41 a month, according to the FCC, is triple the amount of two decades ago, when the agency began tracking the rates. Pay TV distributors have responded with slimmed-down bundles, but so far that hasn’t been enough to staunch subscriber declines.

Consumer choice, made possible by technology, is fueling the rapid changes in the environment. Pay TV operators are certain to be more concerned over consumers’ growing appetite for a la carte channels, from which consumers could cobble their own personalized bundles. Some 41% of respondents surveyed recently by PricewaterhouseCoopers said they’d prefer the option. Given the growing number of OTT choices, personalized a la carte bundles seem to be a phenomenon on the near horizon.

In the end, though, Darwinism doesn’t seem to apply to television’s evolution. Broadcast, thought surely to be left for dead as cable emerged, has continued to thrive alongside cable, which has remained dominant next to satellite-TV, which has remained aloft since households began to plug into telecom television. (Q: What’s the state flower of West Virginia? A: Satellite dish)

For now and the foreseeable future, television will continue to thrive on the incumbent economic model of ads, retransmission fees and sizeable slices of the nation’s monthly cable subscription. Even as old-school executives like Bewkes of Time Warner and Moonves of CBS move first to embrace OTT, they remain among the most ardent defenders of the status quo.

But in repositioning their companies, and becoming examples to other cohabitants of the ecosystem, they are wisely fearful enough.