Events in 2012 such as the Olympics and the U.S. presidential debates have reaffirmed the value of event-based television programming as a core component of the global media services landscape. However, other ongoing changes in both audience and advertiser behavior continue to transform the media and broadcast industries. As the physical distribution networks change, the ways consumers consume broadcasts also are changing. This requires content production and delivery professionals to re-examine the capabilities and design of their system architectures.
In July and August 2012, in association with Avid, Ovum conducted an independent survey of 200 senior broadcast, pay-TV, studio technology and operations executives to better understand where these industry leaders see the industry going.
The results are revealing. Seventy-eight percent of respondents say that over the next decade, most content will be customized for individuals. This represents an inversion of the existing broadcast business model. Rather than create a single stream of content for an undifferentiated mass audience, tomorrow’s successful businesses are being challenged to create multiple orchestrated streams of media and deliver it across many different devices.
With this in mind, the survey asked, “What share of total television viewing, in terms of share of total viewing time, will be delivered via the web in 2017?” We provided ranges designed to give a neat bell curve. We got back a skew. (See Figure 1.) As of Q4 2012, approximately 3.5 percent of average weekly viewing time per household was via the web. Yet, 44 percent of the survey respondents believe that the percentage of web-based viewing will rise above 20 percent by 2017 (about 29 minutes per day). An additional 27.5 percent of the respondents believe that 30 percent of household viewing time, or more than 44 minutes per day, will be web-based.
Despite this shift, the market remains bullish. Sixty percent of respondents believe that the broadcast market will strengthen over the next five years, with 28 percent neutral and 12 percent predicting contraction. This is a more positive outlook than Ovum has seen in comparable studies conducted in 2009 and 2010. So, what is the source of this positivity, and what will drive it?
Conventional wisdom has held that multi-screen services will erode broadcaster revenues. Yet the data indicates that the market believes multi-screen services will be the primary source of growth, followed by increased linear audiences as a direct consequence of second-screen on-demand and companion services. Eighty-five percent of respondents state that getting their multi-platform distribution strategy right — content, marketing, pricing, operations and architecture — is critical for future growth opportunities.