January 25, 2023
Commentary
The Future of Broadcast Television
- by Bryant McBride , December 30, 2014
One thing that has become clear: Viewers have begun to demand highly customized experiences that meet their individual needs. According to a February 2014 report conducted by Nielsen, 84% of smartphone and tablet owners say they use their devices as second-screens while watching television at the same time. Others are growing wary of traditional broadcast television packages altogether and choose other avenues, like Netflix and YouTube, to watch TV.
Here are my top three predictions on what’s in store for the media and television industry in 2015:
1. The “bridge” from mobile to broadcast television will emerge.
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For the past several years, people have been glued to their smartphones 24/7, no matter where they are – work, home, the gym. In 2014, this phenomenon increased with even more people staring at their second screens (smartphones or tablets) while watching TV.
Some might be multitasking, texting or playing games, but others are actually interacting with viewers through social media channels, or conducting research directly related to what they’re watching. Even more are creating shareable content as a way to engage with a live television event (“The Voice,” “Dancing With the Stars,” etc.).
What was once a one-sided activity has become much a two-way street. That said, until recently, that bridge between mobile usage and broadcast television has been nonexistent, due to the complexities associated with collection, management, integration and distribution of user-generated content.
In 2015, the bridge between the two channels will emerge, allowing viewers to generate content from their smartphones that will seamlessly make its way directly onto the screen in near real-time, allowing users to interact with brands in innovative and exciting ways.
2. Threats to cable television will increase as the “bundle” starts to unravel.
With the emergence of Internet television and the rising cost of traditional TV packages, fewer people are purchasing traditional bundles from providers, such as Verizon, DirecTV and Comcast. This will continue to increase in 2015 with 2.9% of U.S. pay-TV consumers stating they are “very likely” to cancel services in the next 12 months, per Variety.
Just as consumers have begun to demand ways to interact with their favorite brands and television programs, they’re also demanding more customized television packages that only include the programs and channels they want to actually watch. Cable providers will have to consider creating customized micro bundles that forgo the non-relevant channels if they want to stay in the game and keep customers happy.
3. The importance of live television will increase as over-the-top (OTT) options proliferate and become mainstream. OTT options refer to Internet television providers, including Netflix, Hulu and YouTube. According to The Week, while cable companies still have 56 million subscribers among them, Netflix alone has 36 million active users and growing fast. OTT options have allowed many consumers to stray away from traditional cable packages, but one thing they do not offer is access to live television, such as newscasts and sporting events.
One way for cable television providers to ensure they don’t become obsolete is to deliver top-tier live TV experiences. Broadcasters should allow consumers the ability to share their own user-generated content, creating an exciting way for fans to interact with others during sports games, newscasts or award shows, like the upcoming Grammy’s or Academy Awards. This could be in the form of a tweet or photo appearing at the bottom of the screen after a huge upset during the Super Bowl, or of a video of a fan reacting to who snags the Golden Globe for Best Actress in a TV series.
In short, the evolving wants and needs of the viewer is the future of broadcast television. They are in control. In 2015, this will become even more evident, with more people demanding customized television experiences through user-generated content and the option of micro bundled packages.
To keep up, broadcasters must stay current with the latest innovations to adequately engage with their customers.
A few comments. First, we should not automatically equate broadcast with TV. While that was true 35 years ago, it's not so today, with most Americans spending more time watching cable shows than broadcast TV programming. Regarding viewers "demanding" specialized program services----in effect, giving them only those shows they want to watch---- this sounds fine, in theory, but it's not that easy in practice. The only way that a program source can justify producing a series of shows that cater to a particular group's tastes is if there are enough viewers who are willing to pay what it takes, not only to make the shows but to do so at a profit to the producing entity. In the real world of business, this simple principle------attaining and holding critical subscriber mass relative to production, distribution and marketing costs------eliminates 90% of the possibilities, leaving us with mostly mass appeal fare----news, sports, movies, reality stuff, talk shows, game shows, etc. as the most viable options. Which is largely what we have now.
For the record, simultaneous use of laptops, tablets, and smartphones has been a dominant behavior among connected TV users for several years -- it is not new. During that time, and to the disappointment of many, interactions between the TV and these 'second screens' continues to be the exception, not the rule. The argument then was that we simply needed a 'bridge' device to make 'casting' content easier. That device arrived with Internet sticks like the Chromecast, Fire TV stick, etc., but iIt remains to be seen the extent to which the diffusion of these devices will supplant other connected TV modes (e.g., smart TVs, set-top boxes, etc.), or simply be an inexpensive way to connect secondary TVs (those located in the bedrooms, for example) to the Internet. The use case is forming/evolving in real time and 2015 research will be very telling in this regard.
The need for 40 broadcast and cable networks is superfluous in this landscape. Broadcast TV networks still believe the trends are cyclical rather than secular. The million $$$ question is who will be the networks left when the bundled TV credit card with ever growing re-tansmission fees for ever less audiences tuning in expires. Happy New Year 2015!
Leonard, in the event that advocates of unbundled options and "free choice" win----which I don't see happening in a major way----the answer is simple. We will have CBS, NBC, ABC, Fox, ESPN, CNN, Discovery, USA, TNT, Lifetime, and most of the other "mass" programmers, but little else. Instead of fostering diversity, which is an admirable goal, the new unbundled TV world will provide mostly pap and the same old stuff because that's what commands the largest subscription revenues. Of course, there is always the possibility that the 54,000 fans of Thai cooking or the 120,000 fans of badminton will be willing to fork out $2500 a month to sustain programming devoted to such subjects, but somehow, I doubt it.
Agree with everything you said, Ed. One more point - who do you think is providing the pipes to stream all this glorious unbundled product? Step outside of anybody's triple play and you will quickly find out that your new video options are not as cost effective as you might suspect!