TV experts predict hybrid revolution

By Robert Briel
October 6, 2009 15.10 UK

Mipcom 2009 – Cannes. Over-the-Top TV is set to break dominance of the classical broadcast business model, according to an international content trend survey by Global Media Consult.

The research involved 280 media experts and reveals new results on the expected development of the content and TV markets within the next five years.

IPTV, internet-enabled devices and the lacking willingness of viewers to pay fixed subscriptions will lead to a tangible power shift within the content markets over the next five years and bring an end to the predominance of classical broadcast providers.

The survey involved 280 content experts from more than 20 countries providing insights and evaluations on the expected development of the markets in the next five years. According to the survey, hybrid devices and business models – as the combination of linear broadcast and broadband internet-based content delivery – are to shape the market development over the next five years.

The overall market size for content and new IP-based services is supposed to grow – and gain in value: the sectors of broadband and IPTV are to see relevant growth with new content services – while the established TV distribution via cable, satellite or terrestrial will suffer only minor losses in their existing market shares. However, the experts do not see the classical free-TV, pay-TV or platform operators as the drivers of innovation:

It’s the Telcos, IPTV providers, manufacturers of CE devices such as Philips, Samsung or Panasonic and vertically integrated providers of hardware, services and applications such as Apple, Nintendo, Microsoft or Sony that are seen as the winners of the fusion of broadcast and broadband – and are expected to further drive this trend.

Traditional free-TV or pay-TV broadcasters on the other hand, are not expected to play a major role in the hybrid future of TV which means that they might miss significant growth opportunities.

While no dramatic erosion of the established players is expected within the next five years, the survey reveals that their current position is clearly at stake given that the overall market grows.

Reason behind the expected market growth in volume and value are the changing viewer habits: 75% of the experts anticipate viewers to become increasingly selective, demanding soaring special interest content on top of familiar programmes – and this demand is driving content choice and value to the next higher level.

Also, the increasing deployment of hard disc-equipped devices supports this trend. The majority of the content experts believes that the viewer will rapidly embrace intelligent EPGs, search and recommendation engines to find, record and consume content. Only the German experts see a less radical but nevertheless growing influence of hard disc-based devices and advanced EPGs and navigation tools within the next five years.

The trend towards a growing overall market is also underpinned by the evaluation of individual content formats: Non-fictional content is expected to grow and further gain in popularity: 12 out of 16 basic TV formats are expected to grow, such as live sports, fringe sports, news, special interest news (sports, finance, technology), how-to formats and consumer advice, travel, sensual & erotic magazines, gossip, music, special interest music, education & learning. Also user-generated content is expected to gain in popularity.

Only casting shows, call-in formats, home-shopping and religious formats are expected to lose slightly. Fictional content, such as movies, series, sitcoms or soaps are expected to have further growth potential.

Bottleneck for the future of TV remains the willingness of the consumer to pay for new services: 60% of the experts surveyed predict little growth potential for the traditional pay-TV model, where subscribers pay a monthly fee for a bundle of programmes: 68% of the participants expect the content industry and platform operators to introduce a mix of micro-payment and individual payment methods, completed by new personalised advertising models.

Against the background of these massive market changes the sector of content production seems to stay stable: The US is ranked to be the leading content producing nation today – and this position will also stay unrivalled on a five years horizon. Position two and three is given to the UK and India respectively, today – and the same in five years.

In line to the trend of internet-enabled devices and ‘hybridity’ a particular social movement will have great influence on consumer demand and on the production of content formats: It is the rise of the young generation, grown up with the Internet and advanced console gaming – to strongly influence content production in terms of storytelling, visual aesthetics and use of technology.

Christian Knaebel, General Manager and founder of Global Media Consult, comments: “The target of our first content trend study was to analyse important developments of the media markets and narrow these results down to practical information. We had purposely selected a five years time frame to receive hands-on market evaluations. The survey reveals that the content markets will gain in volume and dynamic thanks to IP, hard discs and ‘hybridity’ – an opportunity for all players that are ready to act flexibly, creatively and to anticipate consumer demand. What surprised us is that the experts see CE manufacturers, IPTV and over-the-Top providers so clearly as winners of the hybrid revolution – that’s a wake-up call for the established free-TV, pay-TV- and cable providers not to miss the boat.”