Government to scrutinise future of linear TV amid shift to digital
The government is to scrutinise the future of linear TV broadcasting after new research has found that a substantial portion of the viewing public could be excluded from the general shift towards online viewership.
According to a new Department for Culture, Media & Sport (DCMS) report, linear TV viewing will have declined from a majority of viewing time today to just over a quarter of viewing time by 2040.
The study, titled The Future of TV Distribution, found that, based on current trends, 95% of households will have capacity to watch TV over the internet by 2040.
However, 5% of UK households (equivalent to an estimated 1.5m people) will still rely on traditional linear broadcasting at that point unless intervention is taken.
Such consumers are generally older, have lower socioeconomic status and live in rural communities, with the cost of broadband and lack of digital skills creating barriers to adoption of internet protocol TV (IPTV).
Ramifications for TV ecosystem
The report was independently written by a team comprising researchers from the University of Exeter, University of Leeds and industry consultancies MTM, Real Wireless and Cartesian.
It found that, currently, 87% of households have the capability to watch internet-delivered TV on their main TV set due to the adoption of smart TVs and wide availability of over-the-top (OTT) services, set-top boxes and streaming sticks.
However, just 18% say they currently use the internet exclusively as their TV delivery mechanism, with most using a hybrid of IPTV and broadcast TV to access TV content.
But researchers have projected that, based on existing market dynamics including improved broadband access, by 2040 71% of viewers will rely exclusively on internet delivery for TV access, with around a quarter still maintaining a hybrid model.
“While access to IPTV is set to approach universality in the next decade, the report highlights the sizeable group that will — without support — remain reliant on broadcast TV and lacking the benefits of IPTV,” said report co-author and MTM head of strategy Rob Collier.
He added: “As with the move from analogue to digital over a decade ago, there are a raft of considerations and ramifications for the entire TV ecosystem to navigate as we shift towards IPTV.”
New TV forum
Given the complexities of this expected digital transition, media minister Stephanie Peacock has announced she will chair a new forum to advise on the future of UK TV. The forum will convene working groups of senior representatives from Ofcom, TV broadcasters, infrastructure operators and organisations representing audiences.
Its aim will be to consider how all viewers, including older people and those lacking reliable internet connectivity, can continue to access British TV content as consumer habits change.
The forum will include three smaller working groups, respectively chaired by Enders Analysis chief operating officer and director of TV Gill Hind, Digital TV Group CEO Richard Lindsay-Davies and DCMS College of Experts academic Catherine Johnson.
The sub-groups will meet separately to gather evidence and drive policy development ahead of larger forum discussions, which are set to take place quarterly beginning later this month.
“Streaming has revolutionised the television industry,” said Peacock. “Viewers have never had more choice over what to watch and how to access content. As the shift towards streaming and watching live broadcasting online continues, it is vital that no-one is left behind. I want to ensure that as many people as possible can watch TV in a way that suits them.
“This new forum, bringing together the major players in the TV industry and audience groups, will help deliver a long-term plan that ensures everyone in society can access world-class British content in the decades to come.”
Analysis: Due prominence a core concern
The findings of the DCMS report are likely to have significant implications for broadcasters’ distribution strategies.
Currently, broadcasters are given a high level of prominence on user interfaces via digital terrestrial television (DTT) services. On IPTV, broadcasters are at risk of losing that prominence and therefore could potentially receive less viewing share compared with competitors.
To counter this concern, the Media Act passed earlier this year included a provision to extend the current prominence regime for public-service broadcasters beyond linear TV to include online viewing.
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Then culture secretary Lucy Frazer commented during the draft process that the act intends to “make sure public-service broadcast content is always carried and easy to find for UK audiences on connected devices and major online platforms, including on smart TVs, set-top boxes and streaming sticks, so audiences can easily access this content in the way that best suits them”.
However, such policy is still in the process of being implemented and TV set providers may be incentivised to resist such regulation as their revenues are increasingly driven by advertising across their operating systems. Requiring prominence for public-service broadcasters could eat into their business opportunity.
Meanwhile, DCMS and the broadcasters will need to consider over the long term how to handle the costs associated with providing DTT services as they become less efficient given the expected reduction in audience.
DCMS will need to decide whether and how to renew its current DTT licences come 2034.