Fu­ture sce­nar­ios for the TV and video in­dus­try by 2030

In what ways are dig­i­tal­i­sa­tion and VoD providers such as Net­flix chang­ing the mar­ket of the fu­ture?

The Malta Independent on Sunday - - ENEWS & TECH -

Broad­cast­ers and con­tent pro­duc­ers can no longer rely on their present mar­ket po­si­tion. To se­cure their busi­ness mod­els and fu­ture rev­enue streams, they must open them­selves to co­op­er­a­tion and al­liances, in­clud­ing with di­rect com­peti­tors.

The TV and video mar­ket is highly dy­namic and is char­ac­terised by a great num­ber of driv­ers: dig­i­tal­i­sa­tion, new mar­ket of­fers, and dis­rup­tion by dig­i­tal play­ers en­sure rapid change. More­over, con­sumer ex­pec­ta­tions and us­age habits are chang­ing rapidly in the age of video-on-de­mand and mo­bile me­dia con­sump­tion. This Deloitte Ger­many study on fu­ture sce­nar­ios for the TV and video in­dus­try by 2030 demon­strates what mar­ket play­ers need to be ready for.

VoD and dig­i­tal plat­forms as game chang­ers

Tra­di­tional me­dia con­cepts are a thing of the past, the en­tire in­dus­try is un­der­go­ing fun­da­men­tal change: stream­ing ser­vices are no longer just plat­forms for the con­sump­tion of films and TV pro­grams, now they are in­vest­ing in the pro­duc­tion and li­cens­ing of glob­ally suc­cess­ful own con­tent – and are thus in di­rect com­pe­ti­tion with the tra­di­tional TV and video in­dus­try. At the same time, broad­cast­ers and me­dia com­pa­nies are launch­ing their own on-de­mand of­fer­ings and global con­tent pro­duc­ers are set­ting up their own stream­ing ser­vices.

Also, on-de­mand video has rad­i­cally changed con­sumer be­hav­iour: con­sumers in­creas­ingly ex­pect rel­e­vant and at­trac­tive TV and video con­tent that can be ac­cessed any­time, any­where, and in the for­mat that best suits their im­me­di­ate needs.

The fu­ture of the tele­vi­sion and video in­dus­try

All these fac­tors are al­ready hav­ing an ef­fect on the mar­ket, but what will the fu­ture of TV and video look like in a few years' time? Will global plat­form gi­ants such as Net­flix, Ama­zon, Ap­ple, and Google dom­i­nate the mar­ket? Or will the TV and video in­dus­try de­velop into a di­verse ecosys­tem shaped by co­op­er­a­tion, in which tra­di­tional providers also have a role to play? Who has ac­cess to the cus­tomer and who can make best use of moneti­sa­tion pos­si­bil­i­ties?

The swiftly chang­ing mar­ket land­scape and on­go­ing di­ver­si­fi­ca­tion make it dif­fi­cult to make long-term pre­dic­tions about the fu­ture. That is why we chose a holis­tic ap­proach for the Deloitte study on fu­ture sce­nar­ios for the TV and video in­dus­try by 2030 and look be­yond the cus­tom­ary plan­ning hori­zon of three to five years with the help of sce­nario de­sign.

Our sce­nar­ios are based on a com­pre­hen­sive set of driv­ers that will in­flu­ence the fu­ture of the TV and video in­dus­try. We bun­dled these with the help of ex­pert in­ter­views and an ex­ter­nal en­vi­ron­ment anal­y­sis based on nat­u­ral lan­guage pro­cess­ing al­go­rithms, and eval­u­ated them in a matrix in re­la­tion to their de­gree of un­cer­tainty and their in­di­vid­ual ef­fects on the TV and video in­dus­try.

Dig­i­tal­i­sa­tion, per­son­alised ad­ver­tis­ing, and less reg­u­la­tion

• For the pur­poses of the study we iden­ti­fied ad­di­tional fac­tors that will clearly de­ter­mine the main fu­ture de­vel­op­ments in the TV and video in­dus­try in the fore­see­able fu­ture: • Dig­i­tal­i­sa­tion is fun­da­men­tally chang­ing pro­duc­tion pro­cesses and the dis­tri­bu­tion of con­tent. All-IP is be­com­ing the stan­dard for TV and video, and fast fi­bre op­tic net­works and 5G are en­abling ever more flex­i­ble and mo­bile con­sump­tion of me­dia con­tent. These are be­ing joined by new, in­tel­li­gent rec­om­men­da­tion func­tion­al­i­ties based on artificial in­tel­li­gence and an­a­lyt­ics to ad­dress con­sumers in a tar­geted way. • Video-on-de­mand is gain­ing ground on a broad front, but tra­di­tional, lin­ear tele­vi­sion con­tin­ues to as­sert its role – es­pe­cially in the area of pop­u­lar live con­tent such as sports and ma­jor events. • TV and video ad­ver­tis­ing is adapt­ing to new for­mats and re­ly­ing more and more on the per­son­al­i­sa­tion of ad­ver­tis­ing con­tent. The anal­y­sis of user data makes it pos­si­ble to op­ti­mise ads and con­tent, in­crease the ben­e­fit for po­ten­tial cus­tomers, and ul­ti­mately to win them over as con­sumers. The ex­tent to which this will hap­pen, how­ever, de­pends very much on the will­ing­ness of con­sumers to hand over their data. • Mar­ket reg­u­la­tion in the me­dia in­dus­try will be more mod­er­ate than it is to­day. In par­tic­u­lar in the area of on­line and mo­bile ser­vices, this will re­duce the reg­u­la­tory pres­sure on all mar­ket par­tic­i­pants, es­pe­cially on the tra­di­tional me­dia com­pa­nies. Net­work neu­tral­ity re­mains.

Four fu­ture sce­nar­ios for 2030

As a re­sult of our anal­y­sis, we de­vel­oped the fol­low­ing four fu­ture sce­nar­ios for the TV and video in­dus­try by 2030: • 1. Univer­sal Su­per­mar­ket: A fu­ture where some global dig­i­tal plat­form com­pa­nies have re­placed na­tional broad­cast­ers. • 2. Con­tent Endgame: A fu­ture where global con­tent pro­duc­ers dom­i­nate the mar­ket in the fu­ture. • 3. Re­venge of the Broad­cast­ers: A fu­ture where na­tional broad­cast­ers have suc­cess­fully mas­tered the dig­i­tal trans­for­ma­tion and se­cured a strong po­si­tion in the TV and video ecosys­tem. • 4. Lost in Di­ver­sity: A fu­ture where the TV and video mar­ket has de­vel­oped into a di­verse ecosys­tem in which there are no dom­i­nant play­ers and mar­ket par­tic­i­pants are con­stantly chang­ing.

How can the TV and video in­dus­try adapt to change?

As dif­fer­ent as the four fu­ture sce­nar­ios for the TV and video in­dus­try by 2030 may ap­pear, some univer­sal im­pli­ca­tions are rel­e­vant for all mar­ket par­tic­i­pants and they should take these into ac­count in their strate­gic plan­ning.

Broad­cast­ers and con­tent pro­duc­ers can no longer rely on their present mar­ket po­si­tion. To se­cure their busi­ness mod­els and fu­ture rev­enue streams, they must open them­selves to co­op­er­a­tion and al­liances, in­clud­ing with di­rect com­peti­tors. Joint pro­duc­tion, joint dis­tri­bu­tion mod­els, and even joint plat­forms are suit­able ways of coun­ter­ing the threat from dig­i­tal plat­form providers such as Net­flix, Ama­zon, Ap­ple, or Google.

Be­yond this, es­tab­lished broad­cast­ers and con­tent pro­duc­ers must con­stantly in­vest in their dig­i­tal com­pe­tence, be­cause tech­nol­ogy has be­come a core el­e­ment of their busi­ness pro­cesses. What is cru­cial for them is that they are equally at­trac­tive to both dig­i­tal tal­ents and cre­ative minds. What Bill Gates wrote over 20 years ago will still apply in the fu­ture: "Con­tent is King". How­ever, to pro­duce at­trac­tive con­tent in a fu­ture shaped by dig­i­tal­i­sa­tion and ul­ti­mately to reach the cus­tomer with it, first-class tech­no­log­i­cal ca­pa­bil­i­ties are a ne­ces­sity. For more in­for­ma­tion, please visit www.deloitte.com/mt

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