Growing OTT digital video services are forcing traditional TV companies to make major changes. But collectively, more needs to be done in order for TV's financial performance to see continued strength.
Moody’s Investor Services writes in a recent report the entire TV industry needs to move to ‘non-linear on-demand” recommendation/search software, as well as “freeing up broadband capacity now used to deliver linear content to handle greater volume” for on-demand program distribution.
All this could happen soon -- in theory. “If this broad reshaping of TV technology and distribution came to pass, which would likely take five years, we believe that smaller companies would follow and the industry could be much more competitive and stable.”
But the report from Neil Begley, SVP of Moody’s Investor Service, says the task would be huge because of many disparate TV parties with strong individual interests -- regional cable and telco pay-TV companies, two national direct-broadcast-satellite (DBS) companies, major and minor studios, sports leagues, sanctioning bodies and teams, broadcast and cable network owners, and broadcast stations.
He warns if the TV industry doesn’t form some sort of coalition “operating performance and stability
will come under increasing pressure.”
With Netflix, Amazon Prime and Hulu, Dish Network’s Sling TV, Alphabet’s YouTube, Apple and others, as well as declining network viewership, Begley says “TV’s coming day of reckoning” could arrive.