There’s been a surge of major streaming services into the consumer video market.
With this has come a “multi-billion dollar” expansion of original content creation … and an increase in M&A activity among broadcast companies. These are the integral themes of Ooyala‘s State of the Broadcast Industry report for 2019.
The nine-page report, authored by principal analyst Jim O’Neill, puts the focus on digital video’s growth.
Consider the source: Ooyala’s business is based on offering online video analytics and “monetization solutions that boost revenues from video.”
Translation: It’s not exactly supportive of broadcast and cable TV’s successful ad-supported future.
Noting how Netflix’s move into streaming video on demand was met “with a shrug of the shoulders and, occasionally, outright dismissal,” O’Neill correctly states that, in less than a decade, “Netflix has become the world’s first — and biggest — global television channel.”
Meanwhile, look at the TV landscape.
“Time Warner has been gobbled up by AT&T and, along with NBCUniversal parent Comcast and Disney, is a partner in streamer Hulu,” O’Neill says. “AT&T this year plans to launch multiple streaming services, and NBCUniversal CEO Steve Burke hinted at a potential streaming service launch in the company’s annual holiday card.”
CBS and NBCUniversal, he adds, “have turned selling content to streamers into an art, even calling out impressive revenue streams from OTT sales as highlights in quarterly earnings calls.”
That, in O’Neill’s view, “more than anything else, shines a bright light on the future of broadcasting and the future of streaming. The kinship — like it or not — streamers and broadcasters share is at the core of this year’s State of the Broadcast Industry report.”
To best put where video content stands in 2019, O’Neill turns to a theme offered Friday (1/26) by Magid EVP Jill Rosengard Hill at the Media Ad Sales Summit, presented by Matrix Solutions. In her view, streaming is “TV for the younger generation.”
Perhaps streaming is TV for all U.S. consumers. Ooyala analyst O’Neill quotes none other than Sinclair Broadcast Group President/CEO Chris Ripley. He said, “The notion of a separate broadcast space is totally antiquated. We’re competing with the diversified media companies, we’re competing with the telecom operators, we’re competing with the Internet companies. We’re all in each other’s spaces. We’re all customers of each other. We’re all competitors with each other.”
These comments were likely delivered in a statement advocating for further deregulation of broadcast media ownership rules, as many radio and TV station owners argue that their competition isn’t among themselves, but from unregulated digital media giants including Facebook, Google, Amazon and Netflix.
Indeed, Ooyala’s report — available here — offers plenty of research suggesting adults aged 50-65 increased their OTT viewing by 45% between 2016 and 2017, citing data from Barclays.
Not convinced that viewing habits are changing? A Q3 2018 Kagan study found that adults aged 18-34 spent just 25% of their media consuming time with the TV, compared to 58% on connected devices.
True, traditional TV remains the most-used device for watching content in the U.S., with 42% of American adults’ media time being tied to the television, Nielsen’s Q2 2018 Total Audience Report notes.
But, Ooyala highlights data for viewers aged 35-49. Those numbers were 35% and 48%, respectively.
“Clearly, multiple devices have become the norm, rather than the exception, with Boomers and even the Silent Generation learning new ways to connect with content. Technology has made it simpler.”
To further illustrate that Ooyala’s business is built on digital’s assumption of many roles broadcast TV has enjoyed for decades, O’Neill proclaims — using quotes from others — that the next-gen broadcast TV standard is dead on arrival, and won’t make any impact as 5G technology could render it the next HD Radio.
“It’s time to declare ATSC 3.0 DOA,” said Frank Aycock, a theoretical televisionist and professor at Appalachian State University. “Just like Mobile DTV before it, ATSC 3.0 has not lived (and is not living) up to the hype that heralded its introduction to the 21st Century Television audience.”
It’s up to the broadcast TV industry to attempt to make Aycock’s proclamation a false statement.
To download the full report from Ooyala, click below:
This article originally appeared January 29, 2019 at RBR.com