Turning Digital. Hybrid TV Drives the Transition From Broadcast to Broadband
ITMedia Consulting, June 2010, Pages: 68
The new report is the eighth in our series and provides an in-depth, up-to-the-moment analysis of the evolution of the TV industry in Western Europe, packed with all the essential data you need on the topic. This indispensable and detailed study analyses the impact the economic crisis had on the TV market last year.
We examine the strategies TV operators have used to try to limit damage from recession. Many important changes happened in 2009:
- Pay-TV revenues finally outstripped advertising revenues, becoming the first revenue stream in the European television market.
- For the first time in recent years, the European television market reported a 3.1% decline, compared to 2008.
- For the first time, advertising revenues reported a double-digit decline in the Big Five countries.
- For the first time, digital terrestrial television households have overtaken digital satellite households.
The TV market during the financial crisis. In 2009. Europe faced severe challenges from the financial crisis with heavy repercussions on every sector. While the economy was worsening, consumers were encouraged to stay at home and forced to cut back on spending. As a result, the amount of time consumers spent watching television reached higher levels. The TV industry was profoundly affected by the sharp downturn: the European television market reported a decline for the first time in the recent years. During a recession, TV advertising budgets are often the first to be cut. Ad investors experienced a persistent drop in ad revenues and budgets.
In this context, advertising revenue reported negative performance for the second consecutive year. Revenue from Pay TV continues to represent the main source of growth for the industry: despite shrinking household budgets, it increased, although it showed a lower growth rate compared to 2008. As the report forecast last year, in 2009, pay-TV revenues finally outstripped advertising revenues, becoming the first revenue stream in the European television market. Multichannel TV has boomed in the last few years and the report predicts further growth in the future: despite the economic crisis in 2009, the number of thematic channels continues to rise in Europe. As a matter of fact, multichannel continues to impact significantly on the revenue structure of the TV industry.
However, multichannel TV advertising is stable and still represents a small percentage of total advertising spending. As in the other sectors, it was influenced by the economic crisis, although with a less negative impact. The digital TV market continued to grow at a healthy pace in Western Europe. Satellite Direct-To-Home (DTH) is no longer the most widespread form of digital access: digital terrestrial television has overtaken satellite for the first time, becoming Europe’s largest digital TV platform. Digital switchover (DSO) continues, with some countries, such as Germany, Finland, Luxembourg, Sweden, the Netherlands, Switzerland, Norway and Denmark already completing analogue switch-off in 2009, followed by Belgium and Spain respectively in March and April 2010. Market perspectives. Television is no longer just the device we have always known.
During the last few years, the changes across the media landscape have led to non-traditional consumption practices. Considerable innovations in technologies and the latest potentialities of digital distribution have had a huge impact on the television apparatus as well, which has changed thanks to bigger screens with better resolution images. But not only that. It has also become hybrid, providing both a broadcast tuner and a broadband connection. As a consequence, there has been a recent resurgence in the concept of convergence between Internet and TV.
Indeed, among recent trends, thanks to the evolution of content delivery methods, the predicted media merge has finally involved television, giving rise to new modes of delivery included in the TV set, which cause an additional phenomenon: the hybridization of television. As a matter of fact, the proliferation of fully digitized television in Europe has caused a greater demand for advanced devices capable of delivering not only TV broadcasts, but additional features like web-based services. As broadband adoption starts to become more widespread, consumers are progressively familiarizing themselves with video consumption via the Internet. This is also due to the growing presence of video and television-type content online.
Therefore, the natural evolution of online video is to move onto television sets, where an increasing number of consumers still like to spend most of their free time. Over-the-top services could play a significant role in the proliferation of Internet-connected TVs. Thanks to the accelerating adoption of web-based video offers and significant progress in the quality of online video distribution, content providers have started to consider to deliver their content directly to the TV. Although traditional linear television is still predominant, there is an evident trend towards multi-screen video consumption.
Consequently, some incumbent pay-TV providers have started to develop a multiplatform video delivery strategy: the “three-screen” business model is beginning to evolve. TV, online and mobile services are becoming part of a coherent service provider strategy to add value to pay-TV offers. For the coming years, the publisher predicts that a clear multiplatform strategy seems to be fundamental for pay-TV operators to maintain their market position, differentiate services and gain competitive advantages in a highly aggressive TV world.
- Executive summary
- The TV market during the financial crisis
- Main Trends
- Market Perspectives
- The TV Market in 2009
- Market overview
- Advertising
- Pay TV
- Premium content market: sports rights
- The multichannel television market
- Market revenue
- Multichannel advertising
- Fragmentation in TV audience share
- Digital Television
- United Kingdom
- Spain
- France
- Italy
- The Digital Switchover Process
- United Kingdom
- France
- Spain
- Italy
- The hybrid television gathers momentum
- Connected TV expands online video distribution
- The evolution of over-the-top TV services
- ""TV Everywhere"": the introduction of a Multiplatform TV
- From 2D to 3D
- The proliferation of TV programming online
- Online video copyright debate
- Amazon
- Arqiva
- BBC
- Blockbuster
- British Telecom
- British Sky Broadcasting
- Canal+
- Cello
- Channel 4
- Conto TV
- Dahlia
- Deutsche Telekom
- Digital+
- eBay
- ESPN
- Eutelsat
- Facebook
- Five
- France Télévisions
- Fransat
- Free
- Freesat
- Freeview
- Google
- Grupo Antena 3
- Groupe M6
- Grupo Prisa
- Humax
- Hulu
- INA
- Institut fuer Rundfunktechnik
- Intel
- ITV
- LG Electronics
- Logitech
- LoveFilm International
- Mediapro
- Mediaset
- Microsoft
- MySpace
- Nintendo
- NRJ Group
- Orange
- Panasonic
- Philips
- ProSiebenSat.1 Group
- Radio Televisión Española (RTVE)
- Rai
- RTL Netherlands
- Samsung
- SES Astra
- SFR
- Sky Italia
- Sky Deutschland
- Sony
- Sony Pictures Entertainment
- Switchover Media
- Telecom Italia Media
- Telefónica
- TF1
- The Carphone Warehouse
- The Walt Disney Company
- Tivù
- TNTSat
- Top Up TV
- TVNuméric
- Twitter
- Yahoo!
- Virgin Media
- Vizio
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