The future of TV: The rise of internet broadcast services

TV

The global TV landscape is slowly beginning to change, starting with western European nations and the US. One excellent example is the popularity of Netflix, an internet television network with over 44 million members in more than 40 countries worldwide. Subscribers are able to watch more than one billion hours of TV shows and movies per month, including original series; anytime, anywhere. And they get all of this with a low monthly rate, without commercials or contractual commitments to the service.

However, there’s change coming in US which could shake-up Netflix dominance, as the Dish network, another direct broadcast network with internet watch again services, secured the rights to ABC, ESPN, and other popular channels owned by Disney in a TV service delivered entirely over the internet. While Netflix buys the rights the TV shows and movies, Dish has consolidated TV channels themselves and with 14 million subscribers already, it is little wonder that they are challenging and potentially changing the TV landscape. And other provides are not far behind in negotiating to have their channel included in Dish’s portfolio. DirecTV is likely to strike a similar deal with Disney. Sony has internet rights to Viacom’s channels, which include MTV and Nickelodeon. Verizon recently bought crucial technology from Intel. And technology companies like Apple and Amazon are in the mix, too.

But what does all this mean?

Well, firstly Dish network will reportedly charge around 22€ a month to their subscribers, which equates to less than half of what most American households pay for TV. In addition, Dish’s internet TV service will target young adults who balk at the cost of most TV subscriptions. And so the result could be that many Dish subscribers will cancel their cable service or never sign up for it at all. ”We think there is a group of individuals, 18-to-34-year-olds, who would love to have a lower-cost product with some of the top content out there,” Dave Shull, Dish’s chief commercial officer, told Bloomberg. And while Dish will not have every channel available, they will have some of the big ones such as ESPN and the Disney Channel, and since many people resent paying for TV channels they never watch anyway, having an array of core channels would satisfy the majority of subscribers.

However, the concept of organizing programming by channel is also being challenged, not only by Dish but by Netflix and general watch again services across the world. In the UK for instance, BBC iPlayer and 4oD all offer their consumers a choice of searching for programming by subject. This really implies that channels becoming an outdated way to organize television. They aren’t going away of course, but the experience of browsing TV is still rapidly improving.

A big part of this improved experience also comes in the form of letting people use their watch again or internet broadcast services on more than one device. “Television” no longer refers to the big screen in your living room; that’s just one screen of many. Consumers may prefer to use their phone or tablet or PC. However, the next step could be watching TV anywhere. A true internet TV service would extend to any location, relying on fast cellular connections when subscribers are not connected to Wi-Fi.

This topic of location can also be extended to county or state boundaries and change the idea of local programming as, unlike many traditional TV channels, internet streaming is not affected by what part of the country you are in, meaning it could increase national competition for broadcast services. In addition, there’s also a household question as in the US, as television is currently sold to households, while the phrasing of Dish’s “personal subscription service” suggests that it will be sold to individuals, similar to mobile phone contracts. This would allow for more flexible pricing and a greater personalization of the choice of content, the interface, as well as the advertising.

The advertising possibilities with internet TV are endless, though what is currently offered in many countries is still growing and changing as the landscape evolves. Theoretically though, the targeting offered via internet TV providers would offer an improvement versus traditional TV, as could the payment structure, marrying the analytical possibilities of digital advertising with TV GRPs and YouTube’s cost-per-view. Every day, advertisers are becoming more and more fixated on ROI and seeing where their marketing budget goes. Targeting and in turn, retargeting possibilities offer positive possibilities for all sectors of the communications industry, reducing wastage and extending a brands target group in an effective way. Secondly, if consumers are able one day to watch TV anywhere they like and on any device, taking the emphasis off your TV set and cable box, allows for lots of creative possibilities to connect and engage your audience. Overall though, the next few years will continue to challenge the dominance of traditional TV, with fewer and fewer consumers engaging in traditional media consumption. Marketers and advertisers will need to evolve alongside consumers and continue to innovate if they plan on keeping up with the growing demand for content consumption, on demand; anytime, anywhere.

Sources:

https://pr.netflix.com/WebClient/loginPageSalesNetWorksAction.do?contentGroupId=10476&contentGroup=Company+Facts

http://cdn8.documentary.net/wp-content/uploads/2011/08/future-of-tv-part-5.jpg

http://qz.com/184378/the-future-of-tv-is-coming-into-focus-and-looks-pretty-great/

http://about.dish.com/company-info

http://www.newyorker.com/reporting/2014/02/03/140203fa_fact_auletta

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