IBC 2019: Linear TV isn’t dead just yet

This might sound like a very bold and short-sighted statement, but thanks to the development of IP-based standards, traditional broadcasters might just be able to survive in the digital economy.

This is of course not a statement which suggests business is as usual, there are major restructures and realignments which need to occur to future-proof the business, but linear TV and traditional broadcasters can survive in the cut-throat world of tomorrow.

The change which is being forced onto the world is HbbTV and ATSC 3.0, two new standards for the traditional broadcasters to get behind which offer the opportunity to create the experiences consumers desire and the business model which advertisers demand.

HbbTV, Hybrid Broadcast Broadband TV, and ATSC 3.0 are both standards which aim to take the broadcasting industry into the digital world. Although these standards are not necessarily harmonised, the IP approach effectively forces manufacturers and broadcasters into an era of on-demand content, interactive experiences and hyper-targeted advertising.

Over the last few years, many in the TMT world have been quick to write the obituaries for linear programming, but this is not an area which should be written off so abruptly. There is still a niche for the idea of linear TV, and if executed competently, there will be an audience of Generation Z sitting on the sofa next to the Baby Boomers.

Oliver Botti of the Fincons Group, pointed to two areas where linear TV currently, and will continue to, thrive. Firstly, live sports, and secondly, reality TV programming such as Celebrity Big Brother. With both of these standards, new content, experiences and advertising business models can be enabled to ensure continued relevance.

For sports, additional content can be offered to the consumer alongside the action to offer the viewer more control of their experience. This is something which is becoming increasingly common in the OTT world, though it is yet to genuinely penetrate traditional broadcasting in any meaningful way. The second example Botti highlighted is a very interesting one.

The concept of Celebrity Big Brother is not new to most. Dozens of cameras in a closed environment, following around the lives of prima donnas where at least one will probably make some sort of racist gaff at some point. However, with the new standards, Botti highlighted users can choose which camera is live on their own TV, creating a personalised content experience.

It does sound very creepy, but this is the sort of thing which is likely to appeal to some audiences…

Both of these examples are live content. For some, this experience can not be replicated in an on-demand environment, driving the continued relevance for linear TV. It is a niche, but one which will drive the relevance of traditional broadcasters and the relevance of linear programming for years to come.

Vincent Grivet, Chairman of the HbbTV Association, also highlighted the standards also allow for personalised advertising. This is just as, or perhaps more, important to the survival of traditional broadcasters as without the advertising dollars these businesses will not survive. Advertisers know what they want nowadays mainly because Silicon Valley can offer it. If hyper-targeted advertising is not an option, advertisers will not part with their valuable budgets.

What is worth noting, is that both of these standards rely on the TV manufacturers creating products which allow for success to continue. This is where an issue might arise; currently there is no global harmonisation.

HbbTV has been adopted in Europe, while ATSC 3.0 has been championed in the US and South Korea. China is doing what China does and going down its own separate path, creating a notable amount of fragmentation. This might be a challenge.

Richard Friedel, Executive VP of Technology & Broadcast Strategy of 21st Century Fox, told us that as an engineer he would like to see more harmonisation, but as a pragmatist, he doesn’t see it happening any time soon. All the standards are IP-based, therefore there will be a natural alignment as the industry evolves over the next couple of years, but this does not necessarily mean genuine harmonisation.

This presents a complication for the industry, but let’s not forget that this is a positive step in the right direction. Linear TV might not be attracting the headlines, but if you listen to the right people, it is certainly not dead.

Almost half of UK value streaming video over pay TV

A report by EY showed 44% of UK households think they get better value from streaming services than from any pay TV operators.

This is one of the key findings from “Zooming in on household viewing habits”, a follow-up deep-dive on the annual survey EY conducted last September, which covered 2,500 UK families. This message from the UK consumers was also corroborated by a separate, US-focused research by Deloitte, where nearly half of all pay TV subscribers said they were dissatisfied with their service, and 70% felt they were getting too little value for their money.

One of the key themes coming out of the deep-dive into the UK family’s media consumption habits is the ascendency of the consumption of content over the Internet, at the expense of pay TVs. Despite that cord-cutting has not yet hit the UK hard, 54% of all families are already spending more time on the Internet than in front of the traditional TV, including two-thirds of young users primarily watch content on streaming platforms.

“It’s no surprise the UK is becoming a nation of streamers, but our research shows just how enthusiastically households have embraced it. Over the next 12-18 months we will see the launch of new streaming services to further sate the UK’s appetite for content,” said Martyn Whistler, Global Lead Media and Entertainment Analyst at EY. “However, reports of the demise of traditional TV seem a little premature. Our research shows their popularity is undiminished, with viewers watching them more now than in previous years.”

Although this could spell even more bad news for the pay TV operators, when the consumers do watch broadcast TV, 51% of households mainly just watch the five traditional “free” channels (if you did not count the £150 TV licence as “pay”), up from 46% in 2017.

In general consumers are much more tolerant towards pay TV carrying ads than streaming services do. But, still, more consumers are also willing to pay for the content they like. For example, Netflix ranked number one on the table of apps by consumer spending, according to App Annie. And the Deloitte report showed that in the US, a consumer would subscribe to up to three on-demand streaming services at the same time. The willingness to pay has even extended to catch-up watching, especially to get rid of the ads, according to the report. 18% surveyed would be happy to pay more to stream ad-free catch-up TV, up from 16% in 2017.

Another trends that stood out in the report is the diversification of content consumption platforms and its problems. A third families stream video on multiple screens, while 62% of the 18-24-year olds do so. Meanwhile, a quarter of all households have found it hard to track the availability of their favourite content across different services, apps and platforms. This number went up to 39% among the 18-24-year olds, which should be more tech-savvy.

These trends combined can have some implications for how content is produced, distributed, and monetised. For example, if consumers will most likely binge watch content on streaming services (e.g. the average Netflix user would stream two hours a day), the idea of “episode”, which has worked on broadcast TV, will be less relevant. Or should a long series be released all at once on a streaming platform, or making it available episode by episode as the conventional TV broadcasting does? How should pay TV services improve not only its users’ account management, but also the content’s ID management, to provide more pleasant experience for cross-platform and cross-device users?

As Praveen Shankar, EY’s Head of Technology, Media and Telecommunications for the UK & Ireland, put it: “Our survey demonstrates that audiences are struggling to keep track of their favourite content across various platforms and they are confused by the choices available to them. Technology, Media and Telecoms (TMT) companies need to move away from programme guides and big budget marketing and build artificial intelligence (AI) enabled recommendation engines to push content. This will improve user experience, reduce costs and maximise assets.”

On-demand video streaming has surely gained more impetus again in the last few days. CanalPlus has just launched its own streaming service Canal+ Séries, and Apple is widely expected to unveil a version of video on-demand service on 25 March at an event on its own campus.

Are you prepared for the revolution in consumer entertainment?

There’s a seismic shift taking place in entertainment – and its effect on digital service providers is profound. On-demand media consumption will change every facet of your service offering – and sooner than you think.

Leading service providers are already adopting new strategies to capitalize on the on-demand revolution. Download the new S&P analyst report: On-Demand – Video’s Present and Future.

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