Broadcast television came to Southeast Michigan in 1946 when WWDT-TV (now WDIV-TV) signed on for the first time. In those days, only about 0.5% of local households actually owned a set, a number that would grow 100-fold by the mid-1950s.

At first, Detroit consumers needed rabbit-ears or outdoor antennas to receive signals from a small handful of local stations, including  WXYZ and WJBK. The quality of reception varied day-to-day.

By the early 1960s, however, local cable systems began to bring higher-quality, reliable reception to households throughout the Detroit area. The number of programming options, though, remained limited to affiliates of ABC, NBC, and CBS.

In 1972, viewing options began to expand as local cable began offering Detroit area consumers the opportunity to purchase premium services, including HBO, Showtime, and Cinemax.  Five years later came an explosion of non-premium cable channels such as TBS and CNN.

In the early 1990s, Detroit viewers could not only receive their television programming over-the-air or by cable, but options expanded to include satellite delivery by DishTV and DirectTV.

The next TV innovation came in 2007 as Detroit consumers started turning to the internet to watch streaming channels like Netflix and Hulu.  These new services allowed viewers to watch TV on their phones, computers, and tablets as well as their living room LCD and Plasma screens.

Today, all of this video technology offers viewers the ultimate flexibility to choose how, when, and where to watch TV.  So, what are they watching?

There is cheerful news for small business owners from Taylor to Troy and every city and town in between.

Based on the latest projections from the National Retail Federation, holiday sales are expected to grow 3.6%-5.2% over 2019.  This means despite the economic ravages of the pandemic, Southeast Michigan shoppers will be spending between $10.4 and $10.5 billion on gifts and other trappings of the season.

The NRF forecast is based on an economic model that takes into consideration a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather. NRF defines the holiday season as November 1 through December 31. Numbers forecast by NRF may differ from other organizations that define the holiday season as a longer period or include retail sectors not included by NRF, such as automobile dealers, gasoline stations and restaurants.

"Consumers have shown they are excited about the holidays and are willing to spend on gifts that lift the spirits of family and friends after such a challenging year," says NRF President and CEO Matthew Shay. "We expect a strong finish to the holiday season." 

“Given the pandemic, there is uncertainty about consumers’ willingness to spend, but with the economy improving most have the ability to spend,” NRF Chief Economist Jack Kleinhenz said. “Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago."

Every week, according to Nielsen, significantly more consumers are reached by local radio than by Detroit TV.

For Southeast Michigan small business owners whose marketing budgets have been ravaged by the pandemic, though, the question is which of these media can provide the best return for their advertising investments. An ROI study conducted by Nielsen and commissioned by Cumulus Media | Westwood One provides a conclusive answer.

Between April 30 and May 27 of this year, Nielsen analyzed the sales results of a major retailer who conducted an advertising campaign on both radio and television during that period.  

Using  their Portable People Meter panel of 80,000 consumers, Nielsen measured the purchase behavior of consumers who were exposed to the advertiser's commercials on both radio and television. To learn more about the methodology, click here.

The result of the study indicates that the money invested in radio advertising had a much stronger return than the money spent on TV.

Here are the key findings of the ROI study:

Before we explain AVOD, it is important to understand SVOD.

Southeast Michigan small business owners may not be familiar with SVOD, but chances are they let it into their homes and onto their phones.

SVOD is the abbreviation for Subscription Video On Demand. That is the collective name for streaming networks like Netflix, Hulu, Disney+, and Amazon Prime.  For a monthly fee, these services provide commercial-free access to TV shows, original content, and movies.

These SVOD networks are delivered to viewers' phones, tablets, computers, and smart-TVs via the internet and not over-the-air or cable systems.

SVOD makes up a significant part of what advertisers refer to as OTT (Over-The-Top-Television) and CTV (Connected-Television). OTT/CTV is video-programming content that viewers can only watch on smartphones, tablets, computers, smart-TVs, Amazon Firesticks, and Roku Sticks.  Nielsen reports that 91.5% of Metro Detroit adults own at least one of these devices.

Advertising on Detroit television and cable is becoming less attractive to local business owners as viewers rapidly defect to alternative video entertainment sources including, Netflix, YouTube, Hulu, Amazon and Disney+.

Collectively these streaming services are referred to as Over-The-Top Television (OTT) and Connected-TV (CTV). Viewers can only access this OTT and CTV content via smartphone, tablets, computers, smart-TVs, Amazon Fire Sticks, and Roku Sticks, Nielsen reports that 91.5% of Southeast Michigan adults own at least one these devices. Furthermore, they are using them.

According to Nielsen, OTT and CTV networks now reach 40.2% of all Metro Detroit consumers every week.

More than one-third of Metro Detroit households are 'cord-cutters' or 'cord-nevers'. This means, they have fired their cable or satellite television providers or never subscribed at all. Instead, these consumers are choosing to find their video entertainment elsewhere.

The number of local homes that subscribe to pay-TV services began plummeting in 2013. New technologies has allowed viewers to bypass cable and satellite for more compelling content at lower prices. These cord-cutters now depend on services like Netflix, Hulu, Disney+, and Amazon Prime to fill their multiple screens.

For many years, Southeast Michigan small business owners have been investing a significant portion of their advertising budgets into cable-TV.  The medium had proven to be a low-cost, high-reach alternative to buying commercial on over-the-air television stations. 

Now, because of cord-cutting, there are 1.1 million adult consumers with unconnected TVs. This profoundly diminishes the value proposition of advertising with local cable systems.

There is a powerful and affordable solution, however, for small business owners to reach both the diminishing cable audience and the expanding number of cord-cutters.

Pay-TV is struggling to survive COVID-19.

Before the onset of the pandemic, Nielsen reported that 69% of Southeast Michigan area households received their television programs from cable systems, telephone companies, or satellite operators.  That number, however, is plummeting.

Pay-TV providers in the Detroit area include Xfinity, Dish, AT&T TV, Spectrum, and DirecTV.

"Cord-cutting, people dropping their cable and satellite TV subscriptions, pre-dates the onset of Covid-19. But the pandemic is exaggerating the trend, creating deeper issuers for programming that relies on those services for distribution," Eric Savitz wrote last week in Barron's.  This includes non-premium services like ESPN, TBS, TNT, USA, CNN, and Discovery.

"LightShed Partners analyst Richard Greenfield counts a loss of 1.96 million subscribers to cable, satellite TV, and virtual cable services combined in the first quarter," Savitz continued. "This is the worst combined quarterly drop ever, down 6% from a year ago."

Greenfield said in an interview with Barron’s that what is especially sobering is that most of the first quarter activity pre-dated the virus. The numbers are likely to get considerably worse in the second quarter.

There is alarming news for small business owners who advertise on Detroit television stations: broadcast TV viewers are disappearing at a rapid pace.

Nielsen reports that halfway through the first quarter of this year, the number of people using television has dropped 7.5%. This compares to -6.3% in the fourth quarter of 2019, and -7.0% a year ago,

"If the trend holds, it would represent the largest quarterly decline for TV viewership in our data set," explains UBS analyst John C. Hodulikadding. "Trends have worsened across most age demos with persons 25-34 now falling -17% vs. low double-digit declines throughout 2019. The persons 55+ demo continues to trend down -2%, similar to 2019 (the first year of declining ratings for the demo)."

Radio listenership, on the other hand, has remained quite stable, according to Nielsen. Since 1970, the medium has reached more than 9-in-10 consumers every week.