Graham Lovelace, a UK-based international media consultant, looks into the future of television. The Media reports.
Because each country has its own mix of pay and free-to-air television, and different funding models, it is difficult to make global predictions, according to Lovelace. There is also state intervention in broadcasting and government content protection. Graham Lovelace’s focus over the past 20 years has been TV’s marriage with the internet. “Back then, I thought we would be where we are today circa 1998,” he says.
“In Europe and the UK, TV is seen as a public good and so government gets behind it to ensure that the quality is maintained and the ecosystem of content producers is protected. The broadcasters themselves are obliged by statute to ensure a huge number of high quality programmes are made that are calculated to reach a mass audience.
“So we have a viewing audience that is super-served with high quality programmes across every platform, even online,” says Lovelace. In the US, however, the state doesn’t get involved so TV has always been a commercial medium to sell.
With this in mind, here are his predictions:
Prediction #1: TV viewing will become more of a hybrid experience in many nations of the world. It will be part live broadcast and part online.
Many more TVs will be connected to the internet. A digital TV report (www.digitaltvresearch.com) states that in 2010 there were 103 million TVs connected to the internet globally; at the end of 2014, it was 339 million and by 2020 there will be 965 million. South Korea (52.7%) will have the highest proportion by 2020, followed by the UK (50.6%) Japan (48.6%) and the US (47%).
There will also be more viewers watching video on a non-TV device, like a smartphone, tablet and laptop.
The connected TV scenario is strategically important since it enables the potential removal of intermediaries between broadcasters and TV service providers. Programming content can then go directly to the consumer.
This disrupts the traditional TV value chain in which media owners, rights owners, content producers and content aggregators (in the form of third-party channel providers) have to strike content deals with broadcast networks and TV service providers.
Prediction #2: Increasingly premium content players, such as HBO and ESPN in the US, will bypass the TV service providers and go directly to consumers with a subscription video-on-demand (VOD) service. Some of these will be for international markets, such as Starz Play VOD.
Prediction #3: In the US, the world’s biggest and most mature pay-TV market, we will see more consumers cutting subscriptions to satellite or cable TV. US consumers are fed up with the constantly increasing prices for satellite and cable television, and are sourcing their entertainment online from the likes of Amazon Prime, Hulu and Netflix.
Prediction #4: US pay-TV providers will be forced to respond by launching lower-price tiers, and cut-price internet services, such as Dish.
Prediction #5: Globally, pay-TV revenues will continue to rise as high-growth regions (including Africa) make up for declines in North America and Western Europe. In many markets – like South Africa – pay TV is not nearly as mature as in the US and still has huge growth potential. These providers will be making their channels available over the internet to their subscribers.
Prediction #6: Despite doom-laden headlines in the US, the global TV market is, by and large, in rude health – and will remain so for years to come. Television’s delivery model may be changing, but we devote more time to TV than any other leisure activity. According to the UK’s Ofcom Digital Day research, consumers spend an average of three hours and 52 minutes a day watching television, which is down slightly (nine minutes) from 2012, the year of the London Olympics.
Prediction #7: Despite the take-up and usage of digital video recorders and an explosion of internet-connected TV choices, watching TV on a television, and watching programmes in a live linear channel, will remain the most dominant viewing forms.
In the UK in 2013, 88.7% of linear TV was watched live compared to 89.9% in 2012.
Prediction #8: Broadcasters will continue to make their programmes available on-demand, via services such as the BBC iPlayer, and broadcaster-led VOD will take the lion’s share of online VOD usage, mainly for viewers to catch up on missed programmes.
Prediction #9: Pay-TV providers will continue to make services available for online distribution, bundled with a subscription (the US ‘TV Everywhere’ model), but increasingly as a stand-alone subscription VOD offering.
Prediction #10: Subscription VOD is unlikely to replace pay-TV. It will be bought alongside it, now frequently called ‘cord doubling’. If everyone goes online, they will have access to what are mostly archives and not the latest programmes, as on broadcast. Viewers will have satellite services but will also find reasons to subscribe to Apple TV or Amazon Fire TV.
For the latest on future TV developments, follow Lovelace on Twitter: @glovelace
This post was first published in 2015 The Media Yearbook. A digital version of the full magazine can be downloaded here.
