Director of Media and Digital Contents Business Unit, IDATE DigiWorld
In developed countries, the audiovisual sector is experiencing a period of relative stagnation, which will probably be long-term and therefore lead to many challenges for players in the ecosystem. Although the Internet is the major cause of disruption, there are many factors at play.
IDATE DigiWorld drew up 4 scenarios in the last report “Future TV 2025” based on the market environment evolution and the new competitive situation analysis:
Landscape market evolution
• Fundamental regulatory choices: confirmation of Net neutrality, reconciliation of obligations for linear and non-linear services, reform of regional rights allocation.
• Heterogeneous global growth: emerging markets driving growth.
• IT playing an increasing role in video distribution: 'centralisation' with the cloud, the growth of streaming, the growing role played by captured consumer data.
• Increasingly significant personalised video consumption, on-demand and multi-screen ('TV as a service').
The new competitive situation
With an increasingly influential Internet sector, through pure players quickly establishing themselves in the market, accentuating the phenomenon of disintermediation of established players.
Content is more than ever king and ownership of it is crucial, hence increased competition with exclusive premium content is sending rights prices soaring, and new financial backers of original production are emerging.
Also, the market is experiencing a period of concentration (both horizontal and vertical), driven by restructuring of the telecom operators market and the race for control of content.
In this way, new forms of monetisation are appearing in an environment where pay-TV is experiencing downward pressure due to the polarisation between premium and low-cost, the role of service bundles, the development of programmatic advertising and freemium models.
The Trend scenario: a 2,4% expected global growth per year by 2025
The Trend scenario assumes that 2010-2016 trends will continue. In this scenario, the major determining factors are stable. On-demand consumption of audiovisual services continues to grow without destabilising the linear market. The regulatory status quo maintains a local approach to markets. Finally, we see a steady rise in influence of OTT players.
This scenario corresponds to slow growth of the global market, 2.4% per year on average:
• Growth driven primarily by emerging countries
• Stagnating Western European and North American markets
• An evolving market landscape
Four scenarios forecasted
Three others scenarios have been forecasted, each is in favor the stakeholder kind in particular:
“Convergence” scenario: In the Convergence scenario, TV-Internet-telecom bundled offerings predominate. They enable better prices to be offered and provide a complete range of linear TV and on-demand services, as well as music and games services. Multiscreen consumption, fixed and mobile, is pushed by one (or many) of the operators, providing permanent connectivity to the range of services.
“Disruption” scenario: Personalised video consumption predominates in the Disruption scenario, with more uniform consumer tastes on a global scale. The barriers to worldwide content distribution have collapsed, along with local content regulations. Global players controlling content rights have appeared. The leading Internet players (e-commerce, viral platforms and social networks) play a central role, offering a blend of premium and professional UGC content. The value of the market is under pressure within an oligopolistic OTT video sector on a global scale.
“Syndication” scenario: The Syndication scenario is the most cooperative and most favourable to the TV sector. Similar to how local television stations are affiliated with national 'networks' in the United States, television companies could become affiliated with large national and regional 'entertainment operators', relying on the common core of content they provide, and providing market expertise, relationships to national advertisers, local programming, and their brands and customers in exchange. This transformation takes place in both the broadcast and OTT sectors.
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