By Kevin Chou
FORTUNE -- Few TV series finales have come close to the cultural phenomenon Breaking Bad, which in the U.S. ended its five-season run on September 29. It seemed like everyone was watching the show; the viewership numbers for the final episodes were routinely described in the TV trade press with words like "stunning" and "whopping."
The actual figure for the finale in the U.S? Ten million people -- 10.3 million to be precise. For U.S. cable show finales, Breaking Bad ranked third behind The Sopranos and Sex and the City, which were watched by 11.9 million and 10.6 million people, respectively. Those are dedicated fans. The number of people who watched only one or two episodes of those shows may be 20 million.
Impressive numbers, to be sure -- at least until you compare them to the number of downloads for Fast and Furious 6: The Game, a free driving game from my company that's for mobile devices and is based on the popular film franchise. That number? More than 33 million. Or compared to the free jewel-gem game Candy Crush Saga, which is played by about 40 million people a month. Now those are impressive numbers.
The fact that a driving game that went largely unnoticed by mainstream media attracted almost twice the number of people than the most-chronicled event in TV entertainment in years shows that mobile games are rapidly overtaking television and movies as the most popular source of entertainment for a growing part of the population. And that is true by just about any metric, from time spent to dollars spent.
By the end of last year, according to Flurry Research, consumers in the U.S. were spending 17% more time with their mobile phones than they were watching TV. Figures for other countries show similar trend lines. Games, by far, represent the biggest category of mobile apps, as well as the fastest growing.
And inside the world of games, free-to-play games like Fast & Furious 6: The Game and Candy Crush Saga continue to post multiple-digit annual increases. This is true across all demographics, including gender, age, and income.
Games are the entertainment of the future, and free-to-play is the future of games.
Not only is mobile device use increasing, but TV viewership is cratering. According to Nielsen, TV viewing by 18-24 year-olds -- a key demographic for advertisers -- has declined during each of the last six consecutive quarters. In the course of two years, the decline amounts to 24 minutes a day, which is, Nielsen rather ominously notes, the length of the average sitcom.
In terms of monetization, an April report by Piper Jaffray noted that teenagers spend 6% of their disposable income on video games, compared with 7% on music and movies combined.
Mobile phones and tablets now have the graphics and processing power to host games every bit as compelling as those formerly found only on consoles. And they are bringing the games to the palm of your hand, whenever you want and wherever you happen to be.
With free-to-play games, this takes place at no cost to the player. That is a compelling value proposition. In the U.K. alone, the free-to-play market will increase to $432 million from $348 million in the next two years, a nearly 30% increase, according to SuperData Research. According to IDG, worldwide spending on virtual goods in games will reach $31.3 billion next year.
The fact that games are quietly displacing TV and movies as the entertainment media of choice is having profound ramifications for some of the world's biggest industries. Movie studios, for example, will need to adjust to a new set of rules, one in which they can't simply aggregate content and spool it out to passive viewers on whatever pace studio bosses deem appropriate. Instead, consumers are demanding multiple ways to interact with a studio's content.
High-quality games not only extend a brand's value, especially between content releases that studios directly control, but add a new revenue stream. Gaming can be turned on in minutes to all parts of the world where consumers may not have access to multiplex theaters but certainly have access to mobile phones. The Hobbit mobile game is expected to generate more than $100 million in revenue this year, a portion of which is shared with the developer's Hollywood studio partner, Warner Bros. That's found money for the studio at a time when the movie is not in theaters or fresh on DVD.
Plenty of industries, from travel agents to booksellers to newspapers, didn't see the change happening around them caused by new digital technologies. Those businesses suffered as consumers found options that offered greater convenience and, often, lower prices. Today, mobile devices and free-to-play games are doing to their world what online services and e-commerce sites services did to store fronts and physical media. Consumers are increasingly making a choice to play vs. watch. The entertainment industry is evolving, and consumers are speaking with their attention and their wallets.
Kevin Chou is the co-founder and CEO of Kabam, Inc.
Shane Smith, CEO of Vice Media, talks about finding success online, his unorthodox approach to news, and filming Dennis Rodman in North Korea.
FORTUNE -- Born as an indie magazine, Vice Media has morphed into an irreverent digital media powerhouse, in large part, through the force of personality of its iconoclastic CEO-cum-on-air-personality, Shane Smith. Its approach to the news has been described as "More 'Jackass' than journalism." Yet, Vice's raw, in-your-face voice MOREMiguel Helft, senior writer - Oct 14, 2013 10:19 AM ET
It's cheap, it comes with 5,000 channels, it claims that "TV Will NEVER Be the Same!" What the hell is it?
By Ryan Bradley, senior editor
FORTUNE -- Consider the Rabbit TV. Not the long-eared mammal, this, but a USB stick, packaged in plastic and purchased for $10.73 at a CVS in Scarsdale, N.Y. It lands on your desk one morning with a simple directive, straight from the top: Find out MOREOct 11, 2013 5:30 AM ET
Advertisers who want to reach people who use social media while watching TV need to know their target audience: It's very different from the TV audience as a whole.
FORTUNE -- Social-media enthusiasts, especially those on Twitter, tend to think their hobby is more popular than it really is. If you're on Twitter a lot, and the people you know best are on Twitter a lot, it's easy to delude yourself MOREDan Mitchell, contributor - Oct 8, 2013 10:25 AM ET
Lots of people insist on watching TV while also interacting on social networks. Facebook and Twitter are both trying to capitalize on it.
FORTUNE -- During the extremely tense opening moments of Sunday's Breaking Bad finale, someone on the East Coast wrote on Facebook (FB), "Breaking Bad ... CAN'T BREATHE."
Which seemed odd. This man was expressing an intense reaction to an intense, riveting scene, even as the scene was unfolding -- and MOREDan Mitchell, contributor - Oct 4, 2013 10:37 AM ET
Were we listening to the same AllThingsD interview?
FORTUNE -- "We felt that after viewing the conversation, it seems fairly certain that Apple will launch a television, a watch, and multiple iterations of the iPhone by the end of 2014 as well as a potential new service offering."
That's how Piper Jaffray's Gene Munster -- an Apple (AAPL) analyst who has been predicting the imminent arrival of an Apple television set since MOREPhilip Elmer-DeWitt - May 29, 2013 1:22 PM ET
Thumbs, Cheese, Physics or Ears? How about Maps or the new dock connector?
FORTUNE -- Following the release of the iPhone 5, Apple (AAPL) blitzed prime-time TV in the U.S. Friday with four new ads, three for the iPhone 5 and one for the new EarPods. You can view all four at apple.com. We've posted the YouTube versions below the fold.
Meanwhile, you can vote below for your favorite ads -- and for the Apple MOREPhilip Elmer-DeWitt - Sep 22, 2012 10:24 AM ET
No new TV product this year -- not even a set-top box -- says its source
FORTUNE -- Apple (AAPL) analysts who had been counting on a new revenue stream in 2012 from sales of an Apple-branded TV set -- and believe it or not, there were some -- have two reasons to take another look at their spreadsheets.
1. Bloomberg on Thursday joined the Wall Street Journal in reporting that Apple's talks with MOREPhilip Elmer-DeWitt - Sep 6, 2012 7:40 AM ET
One says Apple's iTV is already in production. Another says it won't arrive before 2014
FORTUNE -- Jefferies' Peter Misek is full of confident predictions in a note to clients issued Friday. Based on his supply chain checks and sales data out of Taiwan, he believes:
iPad builds for Apple's (AAPL) September quarter have been increased to 25 million from 18 million and to 30 million from 22-25 million for December.
That the MORE
A filmmaker makes a strong case that the cable guys will never strike a deal with Cupertino
FORTUNE -- Of the 53 responses posted before noon Wednesday to the Wall Street Journal's latest piece about Apple's negotiations with the cable TV operators -- including TechCrunch's "Everyone has known this for months" -- the most nuanced may have been Victor Agreda, Jr.'s Apple's toughest nut yet at TUAW.
"The cable industry is still MOREPhilip Elmer-DeWitt - Aug 16, 2012 12:07 PM ET
|Don't fight it. Bitcoin has a bright future|
|"The Hobbit" dispute sparks lawsuit|
|Five things you didn't know about Bernie Madoff's epic scam|
|Teen millionaire helping Yahoo become cool again|
|China's bad debt breaks Hong Kong IPO logjam|