Three TV Trends for 2019
Broadcast is changing fast – but not necessarily in ways we might have expected a couple of years ago. Here are three trends to watch for in 2019.
VOD apes traditional media
Streaming services are working hard to steal eyeballs from traditional broadcasters – and they certainly seem to be succeeding. Netflix obliterated analysts’ expectations by adding 7 million new subscribers during the third quarter of 2018. And it is willing to spend some serious money to continue that trajectory.
It is no secret by now that the reason Netflix, Hulu, etc. are investing so heavily in original content is that the studios are looking to withdraw their proprietary content from these platforms in order to launch their own services (eg ‘Disneyflix’). Netflix have indicated that they are allocating 85% of their new spending on original productions, according to Variety.
They will also be looking to capture the heart-of-the-nation market from linear broadcasters – think ‘Great British Bake Off’ or ‘The Bodyguard’ (the latter of which they own the international rights to). There has certainly been a recent shift among these newer players to return to traditional models, which is something we could see more of this year.
Netflix are already releasing popular content on a weekly basis, rather than in bulk. While the convenience of VOD is unrivalled, traditional models are more sustainable, bringing audiences back to their screens time and again.
Address the problem
Linear broadcasters still hold the lion’s share of advertising revenues (as Chris highlighted last month) so have been afforded a long tail.
Until recently, sport might have guaranteed traditional TV providers and advertisers the ROI and levels of engagement to justify colossal spending. It is an axiom that live sports were the glue holding many TV packages together. But OTT services who are flush with cash can buck this trend and destabilise the traditional bundles model. Meanwhile, the ability of the streaming services to target their users more closely has led them to innovate around the advertising model.
Addressable TV advertising allows broadcasters to show different ads to different households while they are watching the same program. With its help, advertisers can move beyond large-scale traditional TV adbuys, to focus on relevance and impact – at least in theory. ITV’s addressable advertising, though, is largely based on region rather than other subtler factors, and is certainly a long way behind other behaviourally-targeted advertising online. Despite its limitations, it already accounts for more than 50% of the revenue generated by their Hub service.
But the technology already exists to allow broadcasters to go beyond geography, or other demographic factors. Doubleclick, Google’s advertising servicing arm, envisages some broadcasters wanting to “leverage their own data, [while] others will lean on media sellers to provide unique data, such as behavioural data to help target light vs. heavy viewers or movie watchers vs. sports watchers”.
Beware the giant killers
OTT operators are likely to garner 64% of the increase in revenues this year, Ovum thinks. Which sounds like a great place to be, but obviously makes their space an attractive one for others to target.
So despite the growing popularity of Netflix, Apple TV and Amazon Prime, the streaming giants have their own disruptors to watch out for. For example, Shudder shows only horror films, Crunchyroll caters exclusively to anime fans, and Fandor to the budding hipster. Ginzberg predicts consumers will increasingly opt for more personalised streaming services, leading to fragmentation in the market.
According to Floris Bauer, Gunpowder & Sky co-founder, “We’re going to see a two-pronged approach… Huge platforms like Netflix, Apple, etc., they’re going to replace the traditional networks and then some. And then, you’re going to see hyper-targeted content within a very specific creative filter, brands which cater to a very specific audience.”
While strategic acquisitions by the big guns might fend off some of the new entrants, it should be stressed that we are still only at the foothills of fragmentation. We wait to see just how many services the market will bear.
All in all, it looks like 2019 will be a gloves-off fight for domination of the broadcast sector. Enjoy.
Rhea Mills
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work across the media, information, technology, communications and entertainment sectors, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.