10 Trends that will Drive TV Tomorrow

04 Sep,2014

 

Global leader in assurance, tax, transaction and advisory services Ernst & Young LLP or EY, as it’s now known, presented a report at the TV.NXT conference being held in Mumbai and organised by leading industry publication afaqs. Presenting an extract from the report presented by senior EY professionals  Devendra Parulekar and Ashish Pherwani

 

The Indian television industry is undergoing a seismic shift. The pace of technological change is accelerating so quickly that finding the right balance between addressing today’s daily operational challenges and planning for the next big thing can be a struggle. Many executives are so focussed on the critical issues that they need to address today that looking forward is nearly impossible. And yet, looking forward is what executives need to do if they want to innovate, prosper and survive.

 

Here are ten emerging trends that we see as having the biggest impact on the future of television in India

1. Unbundling of content will drive new revenue models

Trend:

As seen in both music and books, with the advent of good-quality broadband and increasing per-capita income, TV content will get unbundled. There will be a shift from channel loyalty and TV loyalty to program loyalty and device disloyalty

 

Implications:

1. Need for sachet pricing models -Pricing by episode, series, day, etc willbe required

2. Loss of traditional subscriptionrevenues
3. Threat that high individual pricingcould be hampered by piracy

 

2. Technology will enable omniplatform consumption

Trend:

Consumption will move from one location to many, as viewers’ desire to be entertained across locations will become possible with the aid of technology like wifi. They will consume content across various formats and devices.

 

Implications:

1. Content will need to move seamlessly across devices and locales; storytelling will need to evolve

2. Measurement of viewership will be individualized, and be based on large volumes of actual data
3. Increased adoption of digital supply chain to reduce cost and time

 

3. “On-tap” content will lead to time-shifted bingeing

Trend:

As there is no need for immediacy of viewing (except in sports and breaking news), viewers will access most content at their ease, and indulge in binging (consuming many episodes at once).

 

Implications:

1. Digital asset management wouldneed to be strengthened to enable subscription revenues

2. New pricing and packagingmodels would emerge
3. Growth of Multi Channel Networks

 

4. Increased materialism will move TV consumption from the living room to the bedroom

Trend:

Increased materialism and lower TV, broadband and PC costs will enable families to split their viewing patterns from the “common” or living room, to the “individual” or bedroom

 

Implications:

1. Lower share for GECs and increased importance of niche channels

2. Ability for advertisers to target audiences one-on-one

 

5. Increased broadband will result in increased piracy

Trend:

Broadband growth = Piracy growth. Specially when broadband rates reduce and come on par with cable rates.

 

Implications:

1. Need for industry-level initiatives to curb piracy

2. Flexible & fair content pricing models

 

6. Increased content cost will shift power to the content producer

Trend:

IP will begin to be co-owned by production houses, and not just broadcasters, as increasing content costs will result in increased risk sharing

 

Implications:

1. New models of content licensing

2. Need for robust content use monitoring systems
3. Premium artists start to share the risk

 

7. Digitization will increase importance of niche channels

Trend:

India will digitize its distribution across Phases I to III, and increased collections from subscribers will trickle to broadcasters. Phase IV will remain a fragmented or HITS play, with LCOs retaining their last-mile relationships.

 

Implications:

1. Increased revenues for niche channels

2. Fragmentation of the “GEC” into “sub- GECs” with focused target audiences
3. Possibility of massive viewership measurement at the household level
4. Marketing will need to support Phase III viewership support

 

8. Transparency will lead to perviewer carriage models

Trend:

Carriage is a distribution cost and will be recognized as such, till such time as MSOs begin to collect a larger share of subscription revenues

 

Implication:

1. Per-viewer carriage models will come into being; split across 50 large and medium distributors

 

9. Unicasting could lead to resultbased ad models

Trend:

Ad service will change to unicast models, targeting individual viewers, like the internet.

 

Implications:

1 Advertisers will begin to pay per ad served and viewed, and increased measurement will be the norm
2. Value of a served customer vs. a mass customer will be determined
3. Use of return path (where possible) to drive interactivity

 

10. Social dynamics will lead to more real-time feedback

Trend:

Apart from viewership measurement, trends from social media like Facebook, Twitter, etc. will provide inputs to marketing, pricing and story-telling

 

Implications:

1. Need to implement social media crawlers and big data analytics
2. Content supply chain needs to be flexible

 

Published with permission from EY

 

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