Download - Global Content Compass 2014

Global Content Compass 2014


Trends in Global Television & TV Distribution

June 2014


Introduction & Disclaimer

The Global Media Consult Global Content Compass 2014 is a snapshot of trends in global television and related television distribution infrastructure. The compass uses input derived from a global online survey amongst TV industry experts conducted in February & March 2014. Based on the survey results further research and analysis was done; in specific, a selected number of industry experts were interviewed in person, via phone or email exchange. We had around 300 respondents in our survey and eventually spoke with close to 60 different individuals all around the globe. Our interview partners are a good representation of executives in the TV industry both on infrastructure and content side of the business. They are from all parts of the world and with a good mix of expertise, insight and market know how. Nevertheless, it is not to be meant a scientific research nor does it provide statistical and empirical solid data. Our attempt is rather to provide an overview of trends in order to help players in the industry navigating their businesses. We hence waive any responsibility for business decisions made on basis of our findings. But we will happily consult you on making such decisions and developing your plan for growth.



35% 45% 27%

18%

35% of our respondents are directly involved with content creation or acquisition.

Content

TV Platforms

These respondents work in TV infrastructure such Cable, Satellite, IPTV etc.

Industry Experts

These are consultant, journalists, technology managers, researchers, etc.

New Technologies

18% of our respondents work directly in one of the new technologies such as Mobile TV, OTT services or VOD.

Our Respondents

Roles


Cable/Mso 28%

Sat./DTH 28%

Terr 25%

Mob 19%

23

TV Distribution Infrastructure Which distribution type is the dominant format in the relevant region of our interview partners/

survey respondents? We asked them to rank them and name the most dominant one.

In most markets traditional infrastructure such as Cable/MSO & Satellite is the dominant TV distribution

1

Terrestrial is still still used in many markets as the main access to TV 2 Terrestrial markets correlate with Satellite distribution as the second largest infrastructure and with large Mobile TV penetration

3

IPTV holds second place in many traditional markets and will further grow

4

There is still a digital divide in many markets – especially when people use terrestrial access to TV: here analogue viewing is via terrestrial infrastructure and satellite is the digital venue.

Mobile TV is popular in markets with weak or non existent cable and where satellite

offers limited or expensive services.

Mobile TV The hidden Champion


Growth Trends TV Distribution When looking at trends for growth of various TV distribution infrastructures, you

will not find much of a surprise. We asked our interview partners how they forecast the growth in their relevant markets. Overall, new methods (OTT, IPTV, Mobile) are seen as the main growth sector. Our respondents where asked to rank the growth potential of each infrastructure.

66% believe that mobile TV will show the largest growth potentia; followed by 60% for OTT potential and 50% for IPTV. l

Non-traditional 25% of our respondents see a growth potential for DTH; and less than 20% for cable/MSOs; naturally, terrestrial is only seen with 10%.

Traditional In Cable-dominated markets, a larger growth potential for IPTV is seen than in others.

Cable/MSO

Respondents in satellite markets are less optimistic on their growth potential for satellite than the overall group. Only 15% expect further growth. It seems that in these markets, the saturation is reached and new less developed markets have to be sought. The fear that a new player with OTT services is disrupting the industry is highest here. Satellite operators need to find ways to offer OTT, integrate with infrastructure on the ground and get into the mobile TV market.

Satellite

IPTV is having the best potential in cable markets according to our survey. Here it can rely on established (broadband) infrastructure and less competition from MobileTV. Especially when combined with attractive OTT offerings, it can have large growth. Cable/MSO see this rather as an opportunity than a threat and will likely launch their own IPTV/OTT services.

IPTV

A combination of OTT services and Mobile TV will have huge potential in less developed markets; especially if there is still terrestrial infrastructure as a key access for TV watching. In these markets 70% of our respondents believe that Mobile TV will further grow. It is only followed with some distance by 50% who believe in OTT growth; 43% for IPTV and only 28% for DTH and around 20% for cable or terrestrial.

OTT & Mobile TV

1 2 3

4 5 6

Global Content Compass 2014 43

Mobile TV is only strong when other distribution infrastructure are weak in terms of penetration, service and offering. Especially true for Cable and Satellite. It is also strong, when no reliable & affordable broadband is available.

Weak Alternatives

OTT & Mobile combined can enable market domination of this infrastructure. The merger of the two technologies will make it difficult for any other player to challenge this position.

OTT & Mobile

Mobile devices become more and more TV viewing equipment. Smartphones & tablets offer comfortable viewing and interaction. They are on the verge of becoming the central TV hub and replacing the TV set.

Mobile Devices as central TV hub

Broadband access via mobile will eventually be the killer app – most of all when combined with smart social media integration. This puts Mobile TV in pole position in almost all of the less devloped TV markets.

Future Technology

Mobile TV Markets – a closer Look Our respondents expect in markets with already substantial usage of Mobile TV further strong growth of that infrastructure.

The consumer is used to this ay of watching TV. New devices and content tailor-made for mobile will make it even more comfortable for the consumer.

Take Aways from our findings about Mobile TV

1 2 3 4


Non-traditional Services: a threat? We wanted to know from our interview partners if new services such as OTT, mobile, etc pose a threat to them or an opportunity. The response was clear: almost 86% consider it an opportunity

Only a few fear the new services and see them as a threat. We investigated what these minority might have

in common.

What are the fears of the others?

Industry disruption from a new player These respondents see a non-traditional TV company entering the market and disrupting the industry; and not having a plan themselve to counterattack

1

TV Consumption shifting towards VOD In these markets there is a strong trend towards VOD consumption away from linear. A threat for TV channels in particular in these markets.

2

Piracy Issues

Respondents that fear new entrants and technologies typically deal with a tremendous amount of piracy issues in their markets. New technologies can enhance that problem and open up new battle with new market players.

3

Lacking Counterattack Strategy

The respondents do only see offering more content as a plan for fighting off new entrants. A lack of other creative strategy makes them more vulnerable.

86% of our respondents consider new services such as OTT & Mobile TV an Opportunity

4


The impact of New Technologies

We addressed the impact of certain new technologies on the TV industry. Our respondents were asked to rank them from no impact at all to significant impact (“game changer”).

•  OTT services & Technology is rated by 42% as a game changer

•  Mobile viewing is also ranked by 42% as a game changer

•  37% believe IPTV delivery of content has the game changer role

•  HD technology is listed by 31% as a game changer

•  4K Technology is ranked only by 17% as a game changing impact

•  3D Technology was only considered by 15% as a game changer

OTT

•  OTT was most often named a game changer in cable-dominated markets.

•  It is also expected that a non-traditional player will enter these markets.

•  In addition the integration of social media technology is seen as a key enabler for OTT growth.

•  A strong growth of IPTV in a given market is seen as an indicator for OTT growth and a likely entry of a new player.


Technology Revolution? Almost 57% believe that social

media integration will be a key technology in the future. The supporters of this idea are especially strong in markets where they expect strong growth of OTT, IPTV and Mobile TV. It does also apply more to mature markets for they offer relevant broadband infrastructure and critical mass to make social media integration useful

Social Media Integration

Respondents who see new technologies on the horizon also believe that this will enable a variety of new revenue streams and creative content monetization models. Especially OTT services and Mobile TV are considered a way of earning income in the TV industry.

New Revenue Stream

What technology will potentially revolutionize the industry? We asked if our respondents see any revolution coming soon in TV Technology and if so, what could that be.

Brought to you by Facebook?

It is widely believed that new technologies in combination with social media services can open up big opportunities for a new player from the

outside. Could that be Facebook?

Mobile TV & OTT & Social Media Whoever combines this in an

attractive, affordable service has KILLER APP


TV Set is still the

central media hub

While we see a trend towards more mobile TV consumption,

we are still far away from having mobile devices as a central

media hub.

The role of the TV Set as a central media hub is especially strong in cable TV markets.

1

VOD Services are seen a key element to foster the role of the TV set as the central hub.

2

Establishing yourself as a trusted source for curated content is also stabilizing the role of the tV set.

3

New apps on the TV& innovative content are also considered a good tool to keep the TV set’s central role.

4

The proliferation of viewing devices is not considered to have any effect on overall TV consumption. Rather the time for watching TV is split amongst devices and services: clear winner of this trend will be VOD, Mobile TV and OTT services

Less than 26% believe that mobile devices will replace the TV

set as a central media hub. Nevertheless, mobile devices will gain an important role as a TV

content & programming management tool.

Social Media Integration will be a central element in merging the various services and devices – it will be the linchpin. It has the power to direct, drive traffic towards certain content and devices.


AudienceNeeds The new ways of watching TV changes the audience’ needs: VOD formats and Mobile TV will benefit most from tailor-made formats. The respondents in our survey see less a need for linear TV to come forward with new formats to instill growth or that OTT would need its own formats. While Mobile TV by its shear design will require its own format, it is both a change and risk for producers to create formats dedicated entirely for VOD consumption.

The changes in audience needs opens opportunities for attractive, tailor-made content for Mobile TV. In combination with VOD services it can create a big growth potential.


Audience & Consumer Loyalty

What elements will most likely have an impact on audience loyality and viewership for a TV service?*

In our survey and interviews we asked the respondents on their opinion how audience loyalty and viewership can be secured. The industry has a variety of options to address this issue. We discovered four areas that are most promising in keeping customers loyal. They best work in combination and with slightly different focus for each customer segment. Besides the four major elements listed here, the other strategies such as offering more content, or at lower rates /for free, or having a lot of innovative apps are seen less of useful in keeping audiences loyal.

40% 61% 56% 57% 59%

Two One Three Four

Offering all content on demand Offering more content as an on demand services is a key strategy for customer loyality in saturated markets

Integrate closely with social media The integration with social media & related technology allows for establishing the brand as trusted content curator and service.

Own, high quality productions Producing & offering your own, high-quality content is considered a good method of increasing audience loyalty and establishing viewership.

1

* Respondents could select from a pre-defined lists of elements to rank the level of impact on audience loyalty. Multiple selections were allowed. Percentage reflects the combined number of respondents who ranked this element as with large or significant impact on audience loyalty and viewership.

2

3

4 Be a trusted source of curated content Establishing yourself as a trusted source of curated content for your niche / target audience will keep them loyal to your brand.


The commercial model of TV will see a

Paradigm Shift

New technology enables new revenue streams for content

Technology

Innovative new ways of creating revenue from

content will be developed

Innovation Smaller/ niche players will now have easier

access to income

Niche

A variety of (new) distribution platforms

allows for new ways of monetizing content

Proliferation

The way how TV is monetized has always been a fundamental question of the TV industry. We asked our survey respondents how they see the commercial models will change over the next few years. The feedback was clear and overwhelming: new technologies will enable new ways of monetizing TV. Traditional Pay TV and Advertising revenue will be playing a smaller role in the future.

PayTV & License Fee Advertising


Content is King And makes money Good news for the TV industry: more and more consumer adapt to the idea that they have to pay for good content. More than half of our respondents can observe this in their markets and are optimistic that revenue streams from content will grow further.

Growth of content revenue will be especially strong in mature markets in which OTT and VOD services can be implemented successfully. They will drive the usage of new services and the ability to generate new income from content. Linear TV channels are not seen to grow in these markets or to generate any substantial pay tv income.

In correlation with the growth of income from content and also the establishment of new ways to create revenue streams, the respondents see a stronger than average decline in advertising income in these markets. For them advertising income might even become obsolete one day.

In our survey we could identify a few market segments that are seen as an attractive “new” target group: Especially in mature markets it seems to be worthwhile to go after families and elder citizen with own, high-quality productions. Here is a growth potential for pay content that has not been completely exploited yet.

Content for “new” target groups


TV Content & Format Trends We see growing numbers of TV Formats and content offerings in the markets

everyhwere. There seems not end to the industry’s creativity and productivity. Our respondents do not see any market saturation yet.

Sports remains the genre with the highest growth potential. This is true across all regions and platforms and with a significant growth potential overall.

Sports Children-/family oriented content is also considered having a good growth potential, especially when tailored to new devices and services.

Children/ Family Factual content will also grow with special chances for educational, wildlife & nature, action & adventure focus.

Factual

Within the fictional genre there is growth potential for adventure-related content, followed by thrillers and science fiction.

Fictional News will see less of a growth but has potential when focusing on a thematic or niche audience, e.g. sport news, music news etc.

News Devotional & political content is not seen to have much of a growth perspective; neither have Fantasy & Mystery, Horror & Romance genre.

Other

1 2 3

4 5 6

Live Broadcasting

Live formats will gain marketshare (most all sports events) and will be produced more.

User-generated Content

This segment is to grow and offers tremendous potential in combination with the trends above.


The digitalization and different user interfaces allow for addressing more niche and thematic targets. Which segments does the industry plan on targeting?

Sports and specifically niche sports segments.

58%

16%

61% 53%

68%

54%

Children & Families Elder Citizen Ethnic groups &

foreign languages Young male audience Technology Fans

Attractive Target Segments

As an interesting finding we discovered that the much hyped Millennial Segment is not worth addressing for many players. Are they considers lost already for traditional TV?


Genre-specific Trends We discussed with our survey participants specifically some trends in the non-fiction genre in

more detail and have summarized here some key findings.

Non Fiction 79%

See the

sports segment growing further

54% Believe that

Educational & Instructional Content will grow

33% See growth for

News

44% See a growth in the

Music formats and genre

The perspective is different, when asked about certain specific news channel formats: Thematic news channels are considered to have substantial growth potential; and also local news channel might foster. Regional news channels seem to be less favored.

65% Say that Lifestyle & DIY have growth potential


About Us

Global Media Consult is a leading boutique consultancy focusing on

TV Content & Channel Development, Distribution & Management

Global Media Consult Christian Knaebel, CEO Gruengartenstrasse 1 77836 Rheinmuenster / Germany Phone +49 7227 999 9999 Email: ck@globalmediaconsult. Com www.globalmediaconsult.com

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