Netflix's Co-CEO Predicts 'the End of Linear TV.' Broadcasters Explain Why He's Wrong

Linear TV's ongoing declines aren't breaking news. In July, streaming surpassed all other TV usage categories for the first time ever, according to Nielsen's monthly total TV and streaming snapshot, The Gauge. For the month, a record 34.8% of all television viewing was done via streaming, 34.4% came via cable and broadcast was a distant third with 21.6%. In August, streaming climbed even further to 35% of total TV usage. And according to research by MoffettNathanson, linear TV subscribers are expected to decline by 27 million by 2024, down to less than half of all occupied U.S. households. The linear outlook is grim. And it apparently encouraged Netflix's co-founder and co-CEO Reed Hastings to make a prediction during his company's second-quarter earnings call in July. "It's definitely the end of linear TV over the next five, 10 years," Hastings said. Broadcast Chiefs Share Their Fall TV Strategies in a Changing Landscape However, the new fall TV season is upon us, and Adweek recently spoke with several executives who would disagree with the Netflix co-founder's sentiments. While chatting with the broadcast chiefs from ABC, CBS, NBC and The CW, we asked what they thought about Hastings' grim prediction. Not surprisingly, they all think he's wrong. Here's what they had to say: Value and variety in linear "Everyone's entitled to their opinion," Kelly Kahl, president, CBS Entertainment, told Adweek. However, he noted that linear TV has history on its side. "Linear TV, broadcast television, has survived everything technology has thrown at it for a long, long time," Kahl explained. "It's survived cable. It's survived DVRs and VCRs. Just about anything." Beyond that, there's value in linear TV, explained Kahl: "You can still get broadcast TV for free." And local stations offer benefits that aren't available to streamers. "Our local stations remain an incredibly important and vital component to the communities they serve. When there's a tornado coming into your area, you're not turning on CNN. You're not turning to stream to see what's going on. You're turning your local station on. So I think as long as local stations have that incredible value, and we are partners with those stations, we will also have a lot of value to viewers," Kahl said. Reiterating the call to value, Mark Pedowitz, chairman and CEO, The CW, said that ad-supported linear TV will always offer a vast variety of content for consumers. "From scripted and alternative series to live local news, sports and special events, that is hard to duplicate with success anywhere else," Pedowitz added. Undeniable reach and scale for event TV For Frances Berwick, chairman, entertainment networks, NBCUniversal television and streaming, linear's longevity comes down to a sustained audience. "You only have to look at the reach and scale of broadcast TV today. Look at shows like America's Got Talent and the enormous audience that still delivers, the enormous scale of broadcast generally on any given night that rivals a week or more of consumption of individual shows on many of the SVOD platforms," Berwick said. "Plus, you have the urgency to view a lot of live content, be that big entertainment events, sports or news that broadcast captures." Craig Erwich, president, ABC Entertainment, Hulu and Disney Branded Television streaming originals, strongly disagrees with Hasting's views and echoed Berwick's sentiments. "People will always come to broadcast television for live events. They will always come to broadcast television for a certain type of programming," he said. "We'll continue to focus and excel in that, and that really will be our path to many years of success, which I'm very bullish on." Brand loyalty Berwick noted that Hastings also didn't account for people who enjoy linear TV as part of their daily routines. "Honestly, for great content and the amount of excitement about shows like Law & Order coming back that we can see, and we have that direct connection with the viewer. It's the palpable loyalty that we have," Berwick said. Media companies are also heavily invested in the success of their linear channels. Though buyers told Adweek in August that dollars continue to shift towards digital, linear TV still commands billions in commitments. "ABC is a critical and robust television ecosystem. We're very dedicated to its success and also relying upon that success," Erwich said. Positive signs Despite the ongoing change in the TV landscape, Hasting's prediction has some cracks in its logic. For instance, streaming's non-stop growth may be plateauing. It's notable that the Netflix co-founder's prediction came on an earning's call where the company announced a global subscriber loss of around 1 million. Another major streamer, Peacock, recently announced it remained flat in paid subscribers during an earnings call. And despite linear ratings being down over the past several years, last season, three of the broadcasters—CBS, NBC and Fox—posted year-over-year gains in total viewers. Berwick acknowledges there's "clearly" a shift in consumption. But when it comes to prediction linear TV's imminent demise, she summed it up as simply an "inaccurate assessment."