The second digital revolution is happening and TV networks will be forced to make a dramatic change to their business models, according to Capgemini media and entertainment lead Paul Whybrow.
Whybrow said the industry is “clearly under dramatic change” at the moment but that the first revolution occurred when traditional media had to move across to digital. He also doesn't believe traditional television is doomed, it just needs to adapt.
“The stage I think we're seeing is a much more dramatic change to the business models so that its much more consumer centric,” he said.
“Fundamentally [TV networks] need to adapt. If they continue to operate the way that they're operating they will end up in the area they definitely don't want to be in, which is extinct. But I think they have a fantastic opportunity to adapt.”
Whybrow's comments follow a spate of research from the likes of Citi Research and Roy Morgan looking at the TV landscape as the networks begin to unveil their full financial year results.
Citi recently put the potential risk to free-to-air television from streaming video on demand (SVOD) services at 10% which it said was “not great but not a trainwreck.”
Former LivingSocial marketing director Sebastian Graham said while the figures may dip, he doesn't believe SVOD is going to dominate the television market because the bulk of the market is still in passive rather than active viewing. He said for this reason, and due to the crowded nature of the SVOD business, the mainstream broadcasters' moves into the streaming space are “foolish”.
He said while at some point in the more distant future TV networks will need to expand their offering to the one to one communication space, in the more near-term – the next five years – the true value of their business is in programming, which for the most part hasn't changed.
“Their business is programming and as long as they continue to have strong programming I don't think they need to do too much different,” Graham said.
“Live sport is one of the only two mediums - along with OOH - that I think will be truly mass market long-term. Live sport, you can't get away from it, if someone has the rights you've got to watch it there.
“There won't be anything else that can match the scale so it's probably a really strong place for them.”
Whybrow said while the consumer mantra of 'where I want, what I want, when I want' is “reality starting to come to fruit”, he doesn’t believe living rooms will start shifting away from the television any time soon.
“I think the free-to-air main channels, the broadcast channels, will still be here in five, 10, 20 years' time,” he said.
“But they may become barker channels: the best of a range of programming that you can very easily sit there and watch but it will prompt you through to the more on-demand stuff.”
“Others might be saying doom and gloom but I think its like cinema, which reinvented itself. The free-to-air model will change, it will adapt, but the companies have the ingredients to be able to do that.”
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