30 September 2018
Is predicting the future of broadcast difficult ?
After many years working in any industry , it is typical that a lot of your friends are involved in the same industry as you , be they suppliers , customers , colleagues or business partners . And thus , it follows that you and your friends are likely in some way affected by the fate of that industry . I meet many people who work in various broadcasting roles around Southeast Asia ( SEA ), and quite a few from around the world , and what I find surprising is how little they talk about the future of our industry . Fewer still are doing much to change that future .
Why is it important to change the future of TV ? Well , let us take a look at what is presently happening and extrapolate that to help us predict the future .
There are many different types of broadcasters ; for simplicity , let us look at two of the main types of indigenous TV operators in SEA , free-to-air ( FTA ) broadcasters and pay-TV operators . The former has two main types : national broadcasters , typically funded by the government ; and commercial channels , mainly funded by advertising .
While the advertising model has served FTA broadcasters well for many years , the tide is changing . In 2017 , online advertising spend reached US $ 210 billion worldwide , representing 41 % of the market and beating TV for the first time in the history of broadcast and the Internet — with TV bringing in $ 178 billion , representing 35 % of the market . Furthermore , that spending delta is not just growing over TV ad spend , it is accelerating .
Now , let us take a quick look at pay-TV operators , be they IPTV , satellite or cable . They too are partially funded by advertising , but also have their monthly subscriptions to rely on . How reliable is that subscription ? Up until now it has been pretty robust , so why change ?
Well , let us look at the West and see how things are there . According to nScreenMedia , US cable , satellite and telecom TV services lost 3.5 million subscribers last year . 2017 proved to be the worst year ever for the traditional pay-TV industry in the US , and this was one of the more conservative numbers . According to a report from Digital TV Research , US pay-TV revenues peaked in 2015 at $ 101 billion but will decline by 26 % to $ 75 billion in 2023 .
So where are all the TV viewers going ? Older viewers , while watching free TV on the Internet and subscribing to over-the-top ( OTT ) services like iFlix and Netflix , are still watching TV and maintaining their subscriptions . The big change are the young adults , or the digital native millennials , who do not want to be saddled with monthly subscriptions to pay-TV operators . Nor do they want to wait until Saturday at 9pm to watch a show — they are the ‘ now ’ generation , who are much more comfortable consuming video on mobile devices than their parents .
For this new generation , linear TV is too restrictive , too scheduled , and too old-fashioned ! The problem is , they are not only future subscribers , but they are the present spenders that companies want to advertise their products to . If they are not watching TV , the ad companies will advertise where they are watching , on platforms like Facebook , where they are engaged and spending their time .
To make matters worse for traditional broadcasters , Facebook and Google have become TV operators too .
It would seem that there is a general inertia in SEA when it comes to investing in new broadcast infrastructure . This is necessary to increase flexibility of delivery and to deploy new high dynamic range ( HDR ) and 4K / Ultra HD ( UHD ) services ; to build new 4K / UHD TV studios for more vibrant productions , and roll out new and cost-effective solutions to allow more live coverage of multiple events and specialist programming .
It is clear to me that , if we do not start changing the way we broadcast today and what we broadcast , predicting the future of broadcast will not be difficult . q
FINTAN
MC KIERNAN , CEO , Ideal Systems ,
South-east Asia , and an APB Panellist