The emergence of online content delivery could be as disruptive to traditional television as digital print was to the newspaper, according to a Boston Consulting Group report.
‘The Value of Content’ compiled for Liberty Global, forecasted that, due to the television industry facing a much faster period of change than anticipated, such rapid change could see ‘significant numbers’ of TV channels fail.
Free-to-air channels will be in a much better position, the report found, provided they can manage the transition to wide-scale, non-linear viewing.
“The emergence of a new online-content value chain is threatening the history of incremental change, and is changing roles, relationships, and value capture. Over time, this might be as disruptive as the changes experienced by the music, newspaper, and magazine industries,” the report stated.
The report outlined multiple potential scenarios for the future of the television market:
– The industry will continue within the framework of its current structure, with an increased value placed on formats that work well in the non-linear world, such as serialised drama.
– The development of content discovery and navigation tools that work across multiple platforms will disrupt the existing structure of the industry. Traditional distributors that develop compelling navigation tools are likely to survive, while online content aggregators may struggle as a result of the traditional players’ ability to build a stronger relationship with viewers.
– Content rights holders will increasingly adopt direct-to-consumer strategies. Traditional infrastructure-based distributors will suffer from increased cord cutting, while online aggregators will also lose subscribers.
“While there are a range of alternative scenarios for the future of the television industry, we believe that the future is more likely to be revolutionary than evolutionary. The well understood roles within the different value chains will see a significant degree of disruption – and for the players that have traditionally assumed those roles, change will be required,” the report explained.