The State of Broadcast TV in 2019

Any serious discussion about the future of television in the media landscape needs to address the fact that broadcast TV is not dead.

While in most cases this is widely understood, dismissing this common misconception appears to be a prerequisite before tackling the matter at hand.

In reality, broadcast TV now faces a media landscape which in many ways is challenging or toppling its once prime position. But it cannot, and will not, be squeezed out of the picture that easily.

Among the many interesting developments of 2018, were the mergers and acquisitions in the media sector between the likes of Disney, Comcast and AT&T. These moves have made it clear that streaming companies like Amazon and Netflix will face a resilient linear TV sector.

Let’s take a look at the challenges the industry is currently facing.

Challenge 1: Staying relevant.

In every industry from FMCG, to banking and entertainment, through to telecommunications, Generation Z and millennials are a key target audience.

That poses a problem for traditional TV. Whether you’re looking at daily time spent on TV, or at the effectiveness of TV ads, scores rise directly in proportion to age.

Graphic: Time spent on linear tv

In order to keep up with the latest consumer expectations and stay relevant, brands are constantly struggling to understand what these younger age groups are doing, and where they’re doing it.

Our data confirms that Gen Z and millennials are devoting significantly longer periods of their day watching online forms of TV.

They’re also much more likely to be watching television across an array of devices at times, often outside of the usual peak TV hours. Their choice in content genres also sets them apart – they have a pronounced interest in other cultures which can translate into the kind of shows they choose to watch.

They even watch TV differently, preferring to “binge watch” episodes rather than watch them in isolation.

When these changing consumer expectations and behaviors are taken into consideration, it’s not difficult to see why the linear format of traditional TV may struggle to serve those needs. Online TV, with its anytime/anywhere access and its vast content library offering every genre from an increasing list of non-U.S. or UK production companies, has a distinct advantage here.

This has forced the hand of traditional broadcasters and content creators, leading them to introduce their own on-demand or catch-up services to maintain relevance.

While this may look like a blow for linear TV distribution, it’s worth bearing in mind these services are often exactly that – places to catch up on content or consume it at a more convenient time.

Live “linear” viewing still represents the mainstay for many of the major Western powerhouses in original programming and broadcasting, and this will be the case for some time.

Challenge 2: Knowing what consumers want.

Content has become the main differentiating factor in the video market, and as we’ve just covered, there’s certainly a lot of it to choose from.

This “long tail” of television offerings has proved a real asset for streaming services like Netflix, but it can also be a frustration for the consumer, making it difficult for them to find what to watch.

Is too much choice a good thing? For some consumers, the answer is no.

63% of internet users say there is too much choice online.

It’s younger age groups who are most likely to say this too. While personalization will increasingly render this issue redundant, it still highlights the advantages of linear programming, especially when considered with linear TV’s ability to facilitate a communal experience for high value time-sensitive content.

Streamers of film or TV content aren’t just drowning in content either – they’re also drowning in streaming services.

Netflix, Hulu, HBO Now and Amazon Video are now having to contend with services from other major media players with impressive content offerings like Disney, WarnerMedia and Apple, as well as a growing array of niche options focusing on specific genres.

As a result, content creators launching these services are removing their shows from the likes of Netflix to give consumers a reason to go to their own streaming platforms. In other cases, the high budget productions of the top streaming services have also lured popular original programming away from national broadcasters, like with the case of Charlie Brooker’s Black Mirror migrating from Channel 4 in the UK to Netflix.

This means they’re having to fork out more money to watch the content they really want.

Nowhere else is this more evident than in the UK sports broadcasting market, where the average sports fan is having to pay for a multitude of services or broadcast subscriptions to watch every game in the Premier League.

Graphic: Paying for the movie/tv streaming service

Our data clearly shows that in the last few years there has a been an increase in the rate of those paying for film or TV subscription services, but there’s only so many subscriptions consumers will be willing to pay out for.

The recent partnership between Sky and Netflix offering a single subscription for both services is a clear reaction to this, and could be a sign of future collaborations aimed at avoiding a growing consumer discontent.

Bringing the focus back to linear TV here, this rising tide of subscriptions positions linear TV and especially national broadcasters with locally-relevant content as a welcome break from the paralysing choice and growing costs of OTT subscription services.

Challenge 3: Competing for consumer attention.

The pressure on linear TV isn’t just coming from streaming services. Both are part of a wider competition for the consumer’s free time with other media formats.

Graphic: The competition for free time

Consumers are now clocking up an average of around 2:20 hours per day on social media, rising to around 3 hours among 16-24s. Online and print press, games consoles, music streaming and broadcast radio collectively constitute around 5 hours of a consumer’s day. That’s not including the hour and a quarter spent watching online TV, and the 6 ¾ hours spent online more broadly on a daily basis.

Consumer attention in this crowded environment has become harder to maintain.

Linear TV, does however, have a lot to boast about here. With the exception of social media, linear TV captures the largest share of daily media time among consumers, standing at 18%, significantly above online TV’s 12%. And considering social media engagement happens frequently throughout the day whereas TV engagement is mostly in long durations, that’s an impressive feat.

Challenge 4: Retaining its title in advertising.

The fight for ad spend is another one in which linear TV remains a true heavyweight.

Regardless of age, TV ads consistently appear in the top three sources of brand discovery among consumers. This is one of the most powerful examples why linear TV will continue to be a central pillar in the media landscape.

Graphic: Top 3 brand discovery channels by age

Despite having been overtaken by digital ad spend, TV ad spend is still larger than print, outdoor, radio and directories combined.

Commentators often cite TV’s unrivalled reach and the quality of its advertising as proof of its continued relevance, especially considering the rising consumer disillusionment with the state of online advertising manifested in ad-blocking.

Plenty of innovation is on the horizon too, with the adoption of connected TVs ushering in addressable advertising solutions to improve the delivery of ads in the linear TV space.

There’s still a long way to go before addressable advertising saturates the linear TV market, but it’s an important reminder of why we shouldn’t take our eyes off linear TV’s future growth potential.

Against the backdrop of ad-blocking and consumer trust issues with data collection online, addressable advertising and targeting of households instead of individuals without having to deal with personally identifiable information (PII) could prove a real asset.

Click graphic to open trends 2019 report