Downward trend in linear TV screen time…
It is by now a commonplace to say that the massive adoption of superfast access, both fixed and mobile, combined with the use of personal devices, has profoundly
altered our media consumption habits.
This revolution in behaviours is having a noticeable impact on veteran TV industry players. If the use of catch-up TV and recording services had helped to
maintain, and in some cases increase, TV viewing time in the most advanced markets, the downward trend in total screen time is no longer up for debate. Between 2011 and 2015, live TV viewing time decreased by seven minutes in the United States and by 24 minutes in the UK. In a tough economic climate, TV advertising revenue has increased only slightly in most Western markets.
The pay-TV market is seeing the first signs of decline. Pay-TV subscriber numbers have been shrinking since 2014 in the United States, in terms of both absolute
numbers and percentage of TV households, but also in terms of revenue. If the situation in Europe is less alarming, the rate of subscriber growth is nevertheless
on the decline.
… and the rise of OTT services…
At the same time, the adoption of OTT video services and the revenue they generate are both exploding. More than 60% of Americans say they use an OTT
service every day (source: TiVo), while youngsters in the UK now spend more time online than watching TV. Seven to 16-year-olds now spend three hours a day on the Internet, compared to only 2.1 hours watching television (source: Childwise).
The revenue generated by OTT video services has increased virtually exponentially in recent years: it tripled in North America between 2010 and 2016 and
increased 5.5 times in Europe’s five biggest markets.
… driving top TV networks to incorporate OTT as a new avenue of diversification
Veteran TV networks are now having to contend with a whole new landscape in which the competition, the screens and even the viewers have changed, and where their old business models are being threatened. So they have no choice but to enter the OTT fray if they want to hold their own in this paradigm shift.
As a result, all the major broadcasters have rolled out catch-up TV services, but very few offer transactional VOD services. There are a good number of monthly subscription VOD plans available, but this encompasses a wide range of products, from generalist SVOD services to paid access to simulcasts of OTT versions of premium channels. Lastly, a few players, including Germany’s ProSiebenSat.1, followed in early 2017 by France’s TF1 and Italy’s Mediaset, are developing an OTT strategy that is built on creating original content that will be distributed solely online.
Their approach to OTT varies depending on their place in the TV market. Some, especially those with a large back catalogue of programming, see OTT as a new opportunity to air and monetise their productions. Others, notably those with a strong position in their market segment, are working to gain an equal standing
in the OTT market by adopting ambitious strategies. On the flipside, and particularly in the realm of pay-TV, some veteran players are taking a more defensive
approach, working to protect their traditional market and only moving into new channels when forced to do so by a major competitive threat.
This article is an extract from the 2017 edition of DigiWorld Yearbook
What is the DigiWorld Yearbook?
A round-up of the finest analysis from IDATE DigiWorld experts who track global telecom, internet and media market developments year-round.
The DigiWorld Yearbook is published in English and French, and is available in print and PDF versions.
This edition will be available on the 6th of June: Print: €100 excl. VAT – PDF: €65 excl. VAT
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