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?

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