Broadcast industry: ‘Reports of death exaggerated’

Reed Hastings, CEO at Netflix, is not the first to suggest that ‘broadcasting’ – the conventional transmission of linear TV via terrestrial, cable or satellite signals – is on its way out. Hastings has frequently repeated his view that broadcasting will be dead by 2030.

At the same time, many in the ‘Western’ world happily enjoy and endorse the sort of online, on-demand access to Netflix and its rivals. A report from RBC Capital’s equity team says that Netflix usage is up almost 50 per cent this year, and the video specialist is now making an aggressive shift into new nations for the service and expand the sort of success it has enjoyed in markets such as Brazil.

“Netflix has achieved a level of sustainable scale, growth, and profitability that isn’t currently reflected in its stock price,” wrote Mark Mahaney, of RBC, in a note on September 17th. “In its oldest International markets, it appears [to] be scaling to profitability just as quickly as the US market did.”

Mahaney backed up his bullish report with data from his team’s recent internet user survey, and quoted by CNBC. The analyst found that a record 49 per cent of UK respondents watch Netflix for TV or movies, just shy of YouTube’s 52 per cent and far ahead of Amazon’s 32 per cent. But consumer satisfaction in the UK also notched an all-time high.

However, there were many experts speaking over the past few days at IBC who, while accepting the shift away from ‘broadcasting’ have grave doubts about predicting the death of conventional TV, either in the next few years – and in some cases – ever.

For example, Liz Ross who runs Australia’s Freeview service, asked who was going to connect her widespread and very scattered communities with fibre? She explained that 85 per cent of all TV in Australia is watched “live”, and not via any sort of ‘catch-up’. She feared that far from abandoning conventional TV transmissions some governments would have to mandate continued transmissions for poorer and isolated communities.

Richard Lindsay-Davies, chief executive at the UK’s Digital Television Group, was also something of a sceptic. Asked whether the economics of an all-IP transmissions system could be made to work, and whether ‘broadcast’ would die, Davies stressed that the viewer had to be put first. He questioned whether data or bandwidth usage caps would be scrapped, let alone whether 5G would serve complete nations.

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