The FINANCIAL — By 2023, almost all commercial broadcasters are likely to have launched a direct to market subscription service, either under their own brand, or in collaboration with other partners, new report by Deloitte says.
Broadcasters will be monetising in three ways: via advertising (the dominant revenue source today), via SVOD (offering the absence of advertising, among other benefits)15 and through wholesale agreements with traditional pay TV providers.
Pocket money averages £11.20 per week in the UK.1 The nation’s 11-16 year olds, some of whose income is topped up by part-time work, have an average disposable income of £16.30 per week.2
Pay TV starts at £5 a month, or £50 for a 12-month subscription. Pay TV, delivered online, and focused on a specific genre, costs less than a tenth of average pocket money.
UK developments across all facets of pay TV are likely to mirror those in the US. SVOD will increasingly be specialist, not comprehensive, and will often be complementary to traditional TV models. It will fill gaps in the market, rather than displace existing players, at least in the near term.
In some cases, pay TV will come as part of a bundle. Amazon Prime includes multiple subscriptions, including video. According to a survey of US subscribers, Prime Video is the second most important service, after free delivery.
Lord of Living Room
The TV set’s size and picture quality are steadily rising, and cost per diagonal inch of TV is falling. This is encouraging TV buyers to opt for ever larger, higher resolution TV sets, with the latest models offering enhanced colour and brightness ranges (HDR, or high dynamic range).
The quality of alternative screens will also continue to improve over the next five years – but smartphone, table and laptop screens will not get much larger. So TV’s relative size advantage compared to other screens will grow even further, consolidating its status as the default display device for long-form content.
In the first half of 2018, the bestselling sizes of TV set at John Lewis were 55 inches and 70 inches (respectively 121 and 189 times the screen area of a five-inch smartphone).
Over the next five years, we expect total time spent watching long-form programmes to remain broadly constant, at about four hours per day.
The production of 4K and HDR content will lag the adoption of 4K and HDR ready television sets. But the supply of 4K and HDR content has already started to surge, and has become the default for drama and premier sports. Most films are available in 4K.
Younger age groups may end up watching more on smartphones or laptops, but this may be because of lack of access to the family TV set, rather than through choice. Among 18-24 year olds, while demand for short-form on smartphones increased year on year to mid-2018, there was little change in the proportion of people watching live TV, catch-up TV or films on a smartphone,
Over the next five years, broadcasters and dedicated on-demand platforms will increasingly differentiate not just on their brand new productions, but increasingly on the calibre (titles and technical quality) of their back catalogue.
The future of television will include much that is brand new, and will delight for generations to come. That said, a good story, whether a drama, a comedic series or the format of a reality show, is evergreen. TV’s attic has many treasures that older viewers would love to see again, buffed to an HD sheen, and which younger viewers will delight in experiencing for the first time. All’s well that ends well.
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