Connected TV: Prospects and challenges
Tacis P. Gavoyannis, SVP business development at Radius Global Market Research, says the TV landscape is changing at a rapid pace with new models, customised & personalised content, search capabilities and so on, meaning some turbulent times for the industry over the next five years… but the winner will be the consumer (and for them it cannot come soon enough!).
Nearly 42% of all households at the end of 2010 in North America were extremely or very interested in viewing streamed or downloadable TV and movie content. The demand is increasing for services such as Netflix, Amazon, Hulu and Apple.
In the same year there were some 27 million web-enabled devices in the US (media adapters, gaming consoles, blu-ray players and internet enabled TVs.) By the end of 2013 the number of internet enabled TVs is expected to be closer to 150 million units globally.
In less than 50 years we have evolved from two to three channels of broadcast TV to hundreds of channels. Soon this number will be millions of channels. We will be able to watch anything we wish ‘live’ or recorded on any of our chosen platforms such as TV, PC, mobile device or gaming console.
Our research found the following:
Which of the following Internet sites have you used to stream or download TV content?
By the end of 2011 the TV share of the advertising budget will be $200 billion and will continue to grow – with a share double of newspapers in the same time-frame.
The business models continue to be subscription and/or advertising driven. Internet connectivity is emerging as a key new feature but it will be interesting to see if people are prepared to pay for it.
I envisage a polarisation of content creators/providers – from very large with the scale to launch new global formats, to very niche struggling to upgrade to HD. Medium players will be squeezed.
The experience needs to be better:
Which of the following would make you access television content more often through the internet?
Going forward, subscription charges will come under pressure especially in developing markets. As technology drives viewers to multiple platforms, consuming multiple media simultaneously, the ultimate impact is unclear.
Customisation and personalisation of content, search, preferences and finally personalised offerings will provide a new opportunity for brands and TV could continue to protect its ‘premium’ status position.
We will see new subscription models from (monthly, to a la carte) customised content to individuals with or without advertising, the ability to watch in and out of home as well as the ability to access the home from anywhere or just via the basic TV.
How soon will all this happen? I estimate in the next five years or so… the TV industry could see the turbulence and confusion that the newspaper industry has experienced over the previous five to ten years.
The clear winner will be the consumer and for them it cannot come soon enough!
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