TV and Video: Time for the endgame?

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TV and Video: Time for the endgame?

How to plan for a decade of profound change in the TV and video markets

Consumers are being inundated with on-demand video streaming services, as the likes of Disney, Apple and Amazon follow in the footsteps of Netflix and Videoland. Over the next decade, the massive wave of new services could wash away much of the long-standing TV and video industry, both here in the Netherlands and across the world. What will be left standing? And who will emerge stronger than before?

How to prepare for the future of TV and video

In this series of blog posts we will explore various scenarios for how the TV and video market could play out in the Netherlands, and the potential impact on both global and local players active in the Dutch marketplace. What will become of RTL and Talpa? What role will telecom operators, such as KPN, VodafoneZiggo and T-Mobile, play in the future landscape? And will streaming platforms, such as Videoland, RTLXL and NL-Ziet, dominate or diminish?

Our new study helps answer these questions by considering four potential scenarios for the shape of the TV and video market in the year 2030. Each of these scenarios describes a specific, plausible future, which substantially differs from the others. Although it does not attempt to predict the most likely outcome, the study is a valuable guide to how today’s market players could adapt to the many changes and uncertainties confronting their industry.

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Building pictures of different futures

The four scenarios in the study are based on an analysis of a comprehensive set of almost 100 social, technological, economic, environmental, and political drivers shaping the TV and video industry, spanning everything from the importance of sports licensing and piracy to the influence of artificial intelligence and net neutrality. Of these 100 driving forces, we identified 23 that are highly uncertain, but could have a major impact on the market. These include consumers’ sensitivity about data privacy, the level of TV advertising spending, the influence of an aging viewership and how important in-vehicle viewing will be.

 

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High impact, high uncertainty factors

The four future scenarios outlined in the report are based on a careful analysis of these 23 “high impact, high uncertainty” drivers (our zone of interest), as well as “high impact, high certainty” drivers, such as the evolution of targeted advertising and the continued importance of live content. We measured the interdependencies of the 23 driving forces in the zone of interest and their relevance to each other. We then selected a combination of ‘critical uncertainties’ to determine the most challenging, divergent, and relevant scenarios.

The critical uncertainties we used to construct the scenario's are built on the questions "What will the player structure look like, is it driven by global or local companies?" and "Who will dominate access to customers, platform companies of content owners?"

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4 future scenarios

The four scenarios described in the study are:

  • Scenario 1: Universal Supermarket. Broadcasting as we know it today disappears: a handful of global digital platform companies, such as Amazon and YouTube, take over the leading role in aggregation and distribution from traditional broadcasters, such as RTL and NPO. These platforms are highly active across the value chain, controlling creation, aggregation, and distribution of content and the direct customer relationship. As with large supermarkets, each of the digital platform companies offers an extensive range of global and national content, only differentiated by some exclusive productions and sports rights.
  • Scenario 2: Content Endgame.  Content becomes the main differentiating factor in the video market, while distribution, search, and recommendation are increasingly considered commodities. That puts large global content owners, such as Disney, WarnerMedia and increasingly Netflix, in the driving seat. Integrated vertically along the entire value chain, these major content creators withdraw and withhold content from digital platform companies. They focus on distribution via their own channels, bypassing the platforms and establishing direct customer relationships.
  • Scenario 3: Revenge of the Broadcasters. National broadcasters and global digital platform companies coexist in the market, with the former focused on local quality content, and the latter on global productions and blockbusters. Viewers can choose whether they want to watch linear or non-linear content from global or local sources. The broadcasters have evolved into digital platforms, established direct customer relationships, and delivered on-demand content. They have also become adept at targeted advertising and content recommendations, areas that had previously been dominated by the digital platform companies. Supported by content quotas and other regulatory measures, broadcasters are producing highly relevant content that gives them a strong market position.
  • Scenario 4: Lost in diversity. Everyone does everything in this scenario: there are no dominant players. Instead, consumers are served by numerous distribution platforms offering a rich array of competing content, and there is a steady turnover of players in the market. As demand for national content remains strong, partnerships between global and local players are widespread. A clear distinction between content production and distribution is another key characteristic of this scenario.
     

In the next four blog posts, we will consider how each of these scenarios could play out in the Dutch TV and video market, and how they could impact both global and local players in the Netherlands. In the meantime, we are validating our scenario planning and the underlying research through surveys and interviews with executives active in the Dutch TV and video sector. We’ll conclude this series with our takeaways from that outreach.

More information on The future of TV and video?

This blog is part of a series on "Future of TV and video". You can find the other blogs here: 

Do you want to know more on the future of TV and video? Please contact us via the details below.

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