24 May Disruption, Fragmentation, Reinvention, etc – Making sense of key trends in the TV Distribution & Aggregation Industry
We currently witness some tectonic shifts in the way TV content (namely linear TV channels) is being distributed. An advancement in the distribution technology on different areas of the ‘pipeline’ is disrupting the way we watch, receive, aggregate and deliver TV content. From OTT TV service and platforms, to handheld and connected devices, from ubiquitous access to broadband in even the remotest part of the world to mega-bandwidth cables crossing the continents and oceans; all these developments contribute to the creation of a complete new distribution landscape. When in the past TV distribution was dominated by a few single infrastructures and players it is now fragmented in thousands of systems, methods, devices and services.
These major disruptions are naturally the source of new trends and further developments in TV distribution and will impact over the next few years heavily how we not only watch TV but also how we manage this industry.
Here are some of the key trends that will shape the TV distribution industry over the next couple of years.
1. Lots of new content and more of the same old content
To be honest, in terms of content, there is still the same offer in the market. Someone has a video and someone else is broadcasting it. In that content remains the same. The art of storytelling might have gotten a bit more sophisticated and they way we consume the story (i.e. binge on it) might be different. But TV story and content has not changed that dramatically since the first recording of TV at all. What is new though is that we have much, much more available to choose from and that more people are enabled to produce content. The number of TV content hours available these days is astronomical. For every purpose, topic, issue etc there seems to be a video or some form of TV content. Daily new content is created: some of it with the life-expectation of the infamous 15 seconds of fame, some of it with a much longer shelf-life. We have the luxury of addressing every need now with TV content. As a TV distribution executive you can choose from millions of catalogues and providers. The market is full with produce of different quality. This will be even more and more in the years to come.
At the same time, old type of content sees its comeback. From classic TV shows that are hits on Netflix & Co (e.g. Friends, Golden Girls, etc) to reinventing live broadcast (how it all began with TV in the first place), we can proudly say, that TV was never more alive than now – and not dead at all.
2. Linear TV Channels need to reinvent themselves – go back to the future
Linear TV channels feel the impact in the distribution most. They must embrace the change and start to over more content that is unique and special to their very own target audience. It is a matter of survival to define this target audience as elaborate and specific as possible so to meet its requirements, needs and tastes. Audiences like to be entertained without much effort. A Tv channel who has the right hand for choosing proper content for his audience will always play a major role in this particular audience entertainment selection. The TV channels is more than ever the personal programme director of its given target audience.
The need for good content people, programming directors and acquisition teams has never been higher than now
In addition, live broadcast will become again the main turf in which a linear TV channel can excel and establish a loyal audience. Event TV, live broadcasts of subjects that matter to this audience will be a key element of any such TV strategy. Just playing videos out of the server will not be enough. You will need a good team of programming and content people who scout the market for relevant content, and who enhance it with additional values that are dear to the proper audience. The concept of digital tribes will be formed around such linear channels and live events. It can be the linchpin of any digital, thematic silo strategy and from this it can branch off into offering other video services or content products.
3. Pay TV – as we know it – is dead
The type of Pay TV that is currently available in most markets will be obsolete in less than 10 years. Subscribers will not pay any longer for large bundles of TV channels who offer the same fare than any OTT video catalogue (at often much higher price). For non-live pay TV the go-to service will be a VOD catalogue. We will see more of the sort of Netflixes being created: some with a wide appeal and some with a thematic focus. Only live TV channels can survive in this Pay TV environment as they can offer some type of exclusivity: i.e. access to a live event. This will be particularly true for sports. While Pay Tv channels around movies, for instance, will decline, we will see more channels that are covering a certain sports. It will also be true for some form of thematic channels where the audience is willing to hand over the ‘programme director’ role to the channel. It entrusts the channel with the power to make the right choice in what it broadcasts; here again it is important to have a professional team to select the content, prepare it and put into context. Content must be current and relevant and somewhat exclusive. This will also enable such channels to charge subscription fees – and if the target audience is of critical mass, platforms will be happy to carry it.
4. Niche is King
The proliferation of TV distribution infrastructure allows for much wider selection of TV content: but more importantly, every taste in TV content can be met. We will, hence, see much more niche content offerings. People that have a certain thematic interest can now have their own TV content; ethnic communities around the world can access content from their homeland or in their original language. Specific topics will have their specific TV services. The major growth in TV distribution will come from addressing these various needs and matching TV content with TV audiences. It is yet a big untapped market to distribute these various genres and bringing audience, platform and content together. This will also allow new and additional ways to monetize content.
5. New Players emerge
We will see (and do already) new players entering the TV distribution marketplace. From likely contenders such as infrastructure services (typically telcos) to unlikely player such as Amazon, Facebook and Walmart: everyone with access to potential audiences has now the opportunity to offer TV to them. This is also true for the hardware and software producers that are already in the market. No wonder there are rumors that Samsung is planning to launch TV packages as part of selling a TV set. App developers already look eagerly at that market opportunities and so do technology integrators who can now enable telcos within a matter of weeks to offer a full-blown TV service. We will have soon a very diverse market place from which we can choose our preferred TV program or service – and as distributors we have multiple ways of selling to audiences; very often shortcutting the traditional gatekeepers at the cable TV industry or satellite platforms.
6. Traditional TV distribution infrastructures risk to become obsolete
No other TV distribution infrastructure will see a major disruption than satellite soon. Already a lot of content is distributed without ever being uplinked to a satellite. Broadband connectivity around the world makes it easier now to bring a video from Australia to Iceland; more so, it is becoming very affordable to use this way of transmission rather than the expensive satellite transponder lease. This will make satellite companies need to rethink their business and either further increase capacity and decrease prices or integrate more with ‘land-based’ carrier companies. Satellite will be useful for live events and certain data transmission, but it will see the end of its growth path when it comes to DTH offers.
Satellite might be not existent anymore in 10 years for TV delivery
What opportunities await us in distribution?
For the TV distribution industry there are now much more opportunities awaiting us then risks. More and more platforms will need more and more content; and they need people who help them selecting it. Even niche content has now much better chances to be sold than it used to be a few years ago. However, the fragmentation of the market and the vast choice of available content will require to have more sophisticated methods and systems in scanning the market, selection content and delivering it (just in time) to the platform. Data-driven methods will arise and making the selection process easier; and likely we will also see some type of meta crawlers or portals that target the audience so that they can make an informed choice where they find the particular content which interests them.
For the TV distribution infrastructure services such as cable TV and DTH it will become crucial to enhance their services. They can take the role of the ‘metacrawler’ or the ‘programme director’. This will need them to invest in relevant data-warehouse and algorithm software. It will mean to be even closer to the customer than ever before. An exercise though which does not seem to be in their genes. Otherwise they end up being a utility only – and that was always a scary thought to them.
The TV distribution market is at the verge of another boom that will opening up many closed gates and bottlenecks. Vast green pastures need the proper tools and skills to attend to them. It is upon the industry itself to make the best out of it.
If you need help to navigate you, your team or company through all these disrupting forces, do not hesitate to contact us. We are happy to guide and coach you through these changes and making you successful in TV distribution and aggregation.