The Digital Future Is Now

The Digital Future Is Now

Digital disruptors such as Netflix, Amazon, and YouTube have embraced the consumer’s love for video to fundamentally change the customer video experience. Broadcasters have no option but to recognize the disruption and change and reinvent as they go along.

The broadcasting industry is in the midst of a digital revolution. Online video seems to have spread like wildfire, empowering viewers to watch anytime, anywhere, sometimes cutting television out of the equation altogether. People are increasingly turning to smartphones, tablets, and other mobile and Internet-connected devices to watch video. They are using mobile broadband where wi-fi is not widely available.

Networks are fighting to stay relevant. Cable and satellite companies have seen their traditional bundles come under attack from a slew of streaming from à la carte offerings. Content producers are scrambling to develop hit shows that can help networks and digital aggregators differentiate themselves and capitalize on evolving consumer preferences.

Until recently, changes in industry dynamics have been evolutionary rather than revolutionary. However, the new online ecosystem is threatening the roles and relationships among key companies in the ecosystem that have been consistent up to this point.

The robust fixed–broadband infrastructure that is needed to meet the demand for online video is now available. Streaming video has advanced to the point that it is now viewed as a direct threat to traditional TV.

Traditional studios have begun to invest in online productions, allowing viewers to access a wealth of excellent programming when and where they want it. Netflix, Hulu, YouTube, Disney, HBO, Showtime, Amazon, Apple, and Google have launched online-streaming devices to supplement their video-streaming services, and most have commissioned original content as well. The abundance of high-quality online content has attracted consumers and encouraged the shift from linear viewing to on-demand, time-shifted viewing.

Digital studios and content creators are challenging the belief that high-quality content must be expensive. With low costs, and a growing ecosystem of digital aggregators, online and mobile content creators are challenging the long-held belief that producing hit entertainment content must be a very expensive proposition available only to those with deep pockets.

Broadcasters need to be in the driving seat

Broadcasters, who find themselves at the wheel of a changing business, need to become leaders of change by guiding their entire organizations through the adoption and implementation of the technologies that will mark the future of TV.

From abandoning manual processes for automated cloud-based options for buying and selling inventory, to implementing ATSC 3.0 across various channels, it is key for broadcasting executives to be aware of how these changes might affect and be perceived by the company’s different constituents. Broadcasters must leverage their leadership and communication skills to translate change across different generational and operational groups within the organization.

Successful companies will need to disrupt their own business models, implement the cognitive and personalized paradigm, change their own bundle for distribution, reinvent their production factory, offload non-core processes, and use the released capital to secure new footholds in a changing strategic landscape and an altering industry hegemony.

As companies move deeper into the online and mobile landscape, the mindset should not be that they are making a transition from physical to digital. They will have to understand where the business provides unique value and build new business models that deliver on this value. This may well mean that some aspects of the business will contract and die, and it may mean that companies will actively cannibalize themselves. But online, mobile, and nonlinear viewing is here to stay, and companies that can successfully restructure their business models to keep pace with evolving viewer preferences have much to gain. And, if history is any indicator, the many that do not restructure will face the consequences of value destruction.

Share this:

Leave a Reply

Your email address will not be published. Required fields are marked *

6 + 2 =

Stay Updated on Broadcast and CableSat.
Receive our Daily Newsletter.