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OLD BOY · 03-06-2015, 13:29

This article focuses on the BBC licence fee, but interestingly it draws the conclusion that streaming subscribers are becoming more familiar with programming without interruption, and this is slowing advertising sales growth for broadcasters.

It is this slowdown in advertising sales that will kill off most broadcast channels eventually because this is what they rely on for revenue.

It remains to be seen whether the growth of on demand services will allow these channels to make an equivalent profit out of advertising but I suspect that there will be a viewer reaction to being forced to watch advertisements that they can avoid by other means.

http://www.telegraph.co.uk/finance/n...m-Netflix.html

BBC licence fee under 'unprecedented pressure' from Netflix

Extracts

The fast growth of streaming services and pay-TV are "challenging the very premise of mandatory fees", according to a study by PwC

Internet television services such as Netflix and Amazon are “challenging the very premise of mandatory fees” for the BBC and other public broadcasters, according to a major study of the global media sector.

The rise of streaming is altering the landscape of the television industry, the report by PwC said, contributing to “unprecedented pressure” on “the notion of the public licence fee”.

Viewer appetites, patterns of spending in advertising and the competitive responses of traditional pay-TV operators are changing as the internet becomes a more significant delivery system for television, the analysts added.

The economics of television are already shifting in ways that “are challenging the very premise of mandatory fees for traditional broadcasting”, PwC said.

For instance, global voluntary subscription revenues are forecast to grow by 3.5pc per year up to 2019, compared with only 0.7pc for licence fees.

Over the same period in the UK, the overall proportion of households with some form of voluntary subscription television, whether via cable, satellite or over the internet from a telecoms provider such as BT, is forecast to increase from 57pc to more than 62pc.

That predicted growth does not include the added impact of streaming services that are not necessarily bundled with an internet access subscription, such as Netflix and Amazon. Total revenues for such "over-the-top" services are expected to more than double from £216m last year to £497m in 2019. Those streaming services include Sky’s Now TV, as well as those on offer from US technology companies.

Across the television industry, the audience appetite for watching programmes on demand, multiple episodes at a time, is growing, according to the PwC research.

It said: “The public is demanding high-quality original programming, available in a flexible, on-demand manner across numerous devices to satisfy the growing phenomenon of 'binge viewing', and 'over-the-top' services offer the best outlet for this type of consumption.”
The findings are likely to be seized on by critics of the BBC as it prepares to renegotiate the licence fee with the Government. Some have called for it to move towards voluntary subscription funding.

As well as a potentially reduced role in entertainment for public television providers such as the BBC, the PwC research also highlighted the impact streaming services could have on broadcast advertising. Netflix does not carry advertising, for example, and its subscribers are becoming more familiar with programming without interruption, slowing advertising sales growth for broadcasters.

03-06-2015, 13:29	#314
OLD BOY Rise above the players Join Date: Mar 2008 Location: Wokingham Services: 2 V6 with 360 software, ITVX, 4+, Prime, Netflix, Apple+, Disney+, Paramount+, Discovery+ Posts: 15,086	Re: The future for linear TV channels This article focuses on the BBC licence fee, but interestingly it draws the conclusion that streaming subscribers are becoming more familiar with programming without interruption, and this is slowing advertising sales growth for broadcasters. It is this slowdown in advertising sales that will kill off most broadcast channels eventually because this is what they rely on for revenue. It remains to be seen whether the growth of on demand services will allow these channels to make an equivalent profit out of advertising but I suspect that there will be a viewer reaction to being forced to watch advertisements that they can avoid by other means. http://www.telegraph.co.uk/finance/n...m-Netflix.html BBC licence fee under 'unprecedented pressure' from Netflix *Extracts* The fast growth of streaming services and pay-TV are "challenging the very premise of mandatory fees", according to a study by PwC Internet television services such as Netflix and Amazon are “challenging the very premise of mandatory fees” for the BBC and other public broadcasters, according to a major study of the global media sector. The rise of streaming is altering the landscape of the television industry, the report by PwC said, contributing to “unprecedented pressure” on “the notion of the public licence fee”. Viewer appetites, patterns of spending in advertising and the competitive responses of traditional pay-TV operators are changing as the internet becomes a more significant delivery system for television, the analysts added. The economics of television are already shifting in ways that “are challenging the very premise of mandatory fees for traditional broadcasting”, PwC said. For instance, global voluntary subscription revenues are forecast to grow by 3.5pc per year up to 2019, compared with only 0.7pc for licence fees. Over the same period in the UK, the overall proportion of households with some form of voluntary subscription television, whether via cable, satellite or over the internet from a telecoms provider such as BT, is forecast to increase from 57pc to more than 62pc. That predicted growth does not include the added impact of streaming services that are not necessarily bundled with an internet access subscription, such as Netflix and Amazon. Total revenues for such "over-the-top" services are expected to more than double from £216m last year to £497m in 2019. Those streaming services include Sky’s Now TV, as well as those on offer from US technology companies. Across the television industry, the audience appetite for watching programmes on demand, multiple episodes at a time, is growing, according to the PwC research. It said: “The public is demanding high-quality original programming, available in a flexible, on-demand manner across numerous devices to satisfy the growing phenomenon of 'binge viewing', and 'over-the-top' services offer the best outlet for this type of consumption.” The findings are likely to be seized on by critics of the BBC as it prepares to renegotiate the licence fee with the Government. Some have called for it to move towards voluntary subscription funding. As well as a potentially reduced role in entertainment for public television providers such as the BBC, the PwC research also highlighted the impact streaming services could have on broadcast advertising. Netflix does not carry advertising, for example, and its subscribers are becoming more familiar with programming without interruption, slowing advertising sales growth for broadcasters.