‘Ties will be cut to traditional pay TV’ SES Satellite Monitors 2017
The SES Satellite Monitors conference 2017 discussed signal distribution development and the changing face of TV
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ES Astra welcomed industry figures to the Sofitel St James in London on March 21 for its annual SES Satellite
Monitors conference. The satellite and communications solutions
provider presented the findings from its research, which interviewed 55,000 people to determine their viewing habits, as well as SES’s reach and potential audience. Astra GB managing director Mike Chandler
noted that the signal provision for UK television-owning homes has remained fairly stable as a total volume, at 27.3 million homes. However, the largest growth in recent years has been in IPTV (Internet protocol TV), which has taken share from traditional terrestrial signal delivery in particular. High Definition (HD) content has continued
to show growth, with many Standard Definition set top boxes (STBs) now out of the market and replaced with HD ones, Mike added. Ultra High Definition (UHD) signal distribution has also continued to develop worldwide, with more channels being broadcast. Satellite will continue to be the distribution method of choice for UHD broadcast in the immediate future, Mike said, as to show new high quality productions at their best requires significant signal capacity. Journalist and broadcaster Andrew Neil gave
his two cents on the state of British broadcasting. He said: “If you cast your mind back to last
year, I predicted that the BBC charter would be renewed on, or close to, its current terms - it has
been. I said I didn’t think Channel 4 would be privatised, and it hasn’t been. I also said I didn’t think Netflix and the streaming world would be a great disruptor – I’m now not so sure.” He noted that the current age of TV is notable
both for its great quantity and quality, ideas which used to be thought of as mutually exclusive. The video on demand (VOD) subscription
services have continued to grow in popularity, forcing others to up their game, Andrew continued.
Netflix will pass 100 million subscribers
worldwide in April, and Amazon Prime is an increasingly standalone offering with 76 million subscribers. Integration into existing STBs has helped penetration for both, but the big change for both of these major players has been investment in commissioning original content.
Netflix commissioned 1,000 hours of original
content last year, and spent $6 billion on original and acquired content. Andrew said: “These are big numbers and big companies. These challenge the traditional broadcasters. Google has just launched its ‘skinny bundle’ in the US – that’s 40 streamed channels, including major cable networks, for $35 per month, plus unlimited cloud based storage. That is disruptive.” The ‘arms race for content’, he noted, has seen some unheard of production numbers for TV, such as Netflix’s The Crown and its £100m budget. Andrew predicts that this is the shape of drama to come, with huge budgets, especially in the US, where episode budgets will stretch towards $10-15 million per episode. He added: “But is it money well spent? Well, the opening sequence alone of Amazon’s The Grand Tour cost $2.7m – but the show’s launch saw the highest growth of Amazon Prime subscriptions outside of promotion periods, so for them, yes, it is money well spent.” The growth of movie-level production values
in TV productions, with the quality, depth and subsequent cost to compete, now provides major challenges for broadcasters, especially for the BBC and ITV in this country. Traditional revenue streams don’t match up to such an outlay, Andrew noted. Viewing habits have also been changed by
Andrew Neil gave his view on the state of health of UK broadcasting, with the insurgency of video on demand services forcing others to up their game
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the growth of VOD. A viewing base that has become used to on demand viewing sees traditional scheduled services as frustrating, Andrew said. “At the moment in the UK, VOD is still seen as complementary to traditional TV,” he explained. “They are co-existing, but I’m not sure that will
be true in the future. I think ties will be cut to traditional pay TV, and shift towards on demand.” Andrew cited ratings declines in the US,
even in traditionally strong areas such as sports, and a growing dissatisfaction with pay TV across the pond. “The age of paying for 1,000 channels but only six of which you watch is coming to an end,” he warned. “Broadcasters won’t get away with it any more. Netflix and Amazon only make the difference between the viewing choices more stark.” Linear viewing still makes up 75% of the total in the UK, Andrew noted, but the difference will continue to grow. With younger viewers especially, YouTube and VOD are increasing. “These are the viewers of the tomorrow,” he said. “And they are used to getting what they want for £5 per month, not £90 per month. The existing business model may not be fit for the 2020s.” In terms of how broadcasters respond, Andrew
noted it will be a challenge. The mooted BBC iPlayer revamp doesn’t make the corporation any more money, and regardless, the apps which have proved popular are those that aggregate content from a range of broadcasters, not those confined to one broadcaster. “ITV has done a wonderful job saving itself
from decline, but where does it go from here?” Andrew asked. “It’s too small to be a global player. It is surely a takeover target; ITV Studios make it an attractive acquisition. “Channel 4 – again, what is the future? At that scale and for the expense, it wasn’t worth privatising, which raises questions about the business model.” The British broadcaster that does have the budgets, remit and reach to compete – Sky - is already moving, Andrew added. “With 22 million customers in total, Sky has all the attributes to deal with insurgents,” he said. “However, before summer is out, Sky plc will become wholly owned by Fox. Being a wholly owned subsidiary is very different to being your own plc. Decisions will be made and budgets will be allocated outwith their control. “The UK will remain a creative hub with high quality production units. But there is lots of American broadcaster ownership already, and more to come. The danger we face is that talent will be British, but investment decisions and control will be elsewhere. Long term, that will cease to be British broadcasting.” • SES will be hosting its UHD Conference on June 20 at the offices of techUK in London, discussing the latest developments in the technology and its distribution
April 2017
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