Friday, 17 August 2018

Pay-TV - The future is now for the UK's broadcasting and telecom industries

By Chris Kelly, Total Telecom
Friday 20 July 18

A new report by Ofcom shows that demand for online pay TV services is growing at a rate of knots, but will telcos be agile enough to capitalise on this opportunity

The UK's telecoms regulator Ofcom has this week revealed that figures for online streaming services have outstripped demand for terrestrial pay-TV services for the first time. 15.4 million people in the UK signed up for online streaming services during the second quarter of 2018, compared to 15.1 million traditional pay-TV subscriptions, according to Ofcom's report.   The move reflects a shifting dynamic in the UK's viewing habits, as more and more people opt for online TV services. This in turn places higher and higher demand on the UK's fixed line and mobile networks…

The UK's telecoms regulator Ofcom has this week revealed that figures for online streaming services have outstripped demand for terrestrial pay-TV services for the first time.

15.4 million people in the UK signed up for online streaming services during the second quarter of 2018, compared to 15.1 million traditional pay-TV subscriptions, according to Ofcom's report.  

The move reflects a shifting dynamic in the UK's viewing habits, as more and more people opt for online TV services. This in turn places higher and higher demand on the UK's fixed line and mobile networks. 

What better time then, for telcos and broadcasting companies to start forging the kind of relationships that will allow them to adequately monetise this new opportunity? 

“Ofcom’s figures showing that video streaming is more popular than pay TV services in the UK is a clear indication that the future is now for the media and broadcasting industry. Widespread technological disruption over the past decade has led a shift away from traditional broadcast models with time-shifting, streaming and data analytics putting the power in viewers’ hands and enabling people to view the content they want at any time on any device. While services like Netflix and Amazon Video have emerged as major players in the next-generation media ecosystem, more traditional broadcasters have had to adapt their offerings to suit these evolving viewing habits. Catch-up services like BBC’s iPlayer and subscription-based platforms like Sky’s Now TV are examples of this," Brian Morris, vice president and general manager of Global Media & Entertainment Services (GMES) at Tata Communications told Total Telecom. 

But it is not just the big players that stand to profit from this shifting dynamic, as opportunities abound for small niche players too.  

“The shift to streaming, catch-up and subscription-based media consumption is enabled by next-generation infrastructure which has dramatically lowered the barriers to entry for would-be broadcast organisations. While the big players will lead the way, smaller streaming networks are also now in with a shot at success. As viewing habits evolve, there are huge opportunities for different types of businesses, including news distributors, retailers, device makers, entertainment industries and sports to develop new digital video strategies quickly and at scale.”

Telcos in particular will need to move quickly if they are to be the ones to fill the void left by the expanding demand for online content. Ofcom's Sharon White told the BBC this week that she thinks that Britain's terrestrial TV operators should band together to overcome the encroaching threat from OTT players. 

"We'd love to see broadcasters such as the BBC work collaboratively with ITV, Channel 4 and Channel 5 so that they have got that scale to compete globally, making shows together, co-producing great shows that all of us can watch… I think it would be great to see a British Netflix," she said. 

The average amount of time that people in the UK spend watching television has been in decline for a number of years. Last year, the average Brit spent 3 hours and 23 minutes watching television per day.  

In contrast, people in the UK spent just over 5 hours viewing content, across all the devices in their home. 

“Today’s research finds that what we watch and how we watch it is changing rapidly, which has profound implications for UK television.

“We have seen a decline in revenues for pay TV, a fall in spending on new programmes by our public service broadcasters, and the growth of global video streaming giants. These challenges cannot be underestimated.

“But UK broadcasters have a history of adapting to change. By making the best British programmes and working together to reach people who are turning away from TV, our broadcasters can compete in the digital age.”

In truth, Ofcom's new report doesn't really tell us anything that we didn't already know – namely that there are huge opportunities for telcos in the online streaming arena. What remains unclear, is whether telcos will be agile enough to transform themselves into broadcast and content specialists, or whether they will face a fresh, unified challenge from the likes of BBC, ITV and C4. 

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