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The global television industry is in the midst of a digital revolution, and it is now clear that streaming video and non-linear viewing will be the most disruptive forces this industry has ever experienced, according to a new report – The Digital Revolution Is Disrupting the TV Industry – by The Boston Consulting Group (BCG).
The amount of time people spend watching television shows online jumped 50 per cent in just 12 months — from December 2013 to December 2014, the report says. In 2015, in the US and the UK, more than 50 per cent of entertainment programming was viewed on-demand – not according to a schedule fixed by a network or distributor.
“The television industry has seemingly ‘defied gravity’ as the only media industry in which traditional players and business models have not been disrupted by digital distribution. But that is about to change,” said John Rose, a BCG senior partner and co-author of the report. “The explosion of new viewing pathways, non-linear viewing alternatives, and new players along both dimensions will create the same degree of disruption that we have seen roll through media segments, such as music, radio, and print.”
The report highlights several trends that have fundamentally altered industry dynamics:
Four Disruptive Scenarios
The report identifies four potentially disruptive scenarios, depending on which industry participants seize the advantage in the battle for market share:
“TV companies will need to make smart decisions about how to adapt in order to tap into changing consumer preferences,” said Jacob Rosenzweig, a BCG partner and co-author of the report. “To thrive in the digital revolution, TV players must think strategically about how to maximise the assets and content they have, invest where they have gaps, and anticipate where their traditional business models will be most at risk.”
Staying Relevant in the New Ecosystem
The report explores implications for all participants in the video-industry value chain: content creators and rights holders, broadcast networks, cable and satellite companies, and online content aggregators. Content creators and rights holders are well positioned to thrive in virtually all scenarios, but the same cannot be said for others in the industry. Companies with businesses built on traditional TV and streaming video need clear strategies to prepare for the changes to come and – where possible – to influence outcomes in their favour.