The changing face of TV and media

Shifts in consumer behaviour and technology are reshaping TV and media.

Gordon Castle, Head of Ericsson’s Strategy Area Mediacom, explains how these changes bring together linear TV with over-the-top services to create converged media experiences.

“Driven by consumer behaviour and enabled by technology, the media landscape is changing.”

“The TV and media industry will change more in the next five to 10 years than it has in the past 50.”

“The media experience will become more immersive and personal, reaching viewers on any platform, anytime, and anywhere.”

Ericsson ConsumerLab research predicts that, by 2020, people with access to a mobile device will use this for 50 percent of their viewing.

On-demand content will also continue to grow rapidly and account for 50 percent of the total global viewing by 2020.

Over the next five years, the use of data and analytics will advance, making TV more personal with targeted content and advertising.

This will mean that 50 percent of viewing will be on command – meaning, recommendation engines and social networks will help users find content.

Castle says Ericsson has been investing and growing in the media industry for more than 10 years and now has more than 5,000 employees focused on media products and services.

“Market revenues for TV and media are expected to grow to a staggering USD 750 billion by 2020.”

“The industry’s total revenues for 2014 were estimated to be USD 555 billion. We also predict that the new entrants such as Netflix will not gain a significant part of these revenues.”

“The majority is still with the traditional players and, assuming they adapt to remain relevant to the consumer, we should expect them to get the majority of the industry growth.”

“We have had a long held vision of the global situation in 2020, which we call the Networked Society. This is enabled by mobility, broadband, and cloud services.”

“The Networked Society will affect all industries, countries, and society. In TV, we already see the impact on consumers driven by access to content and devices.”

“We predict that by 2020, there will be 26 billion connected devices, of which 15 billion are video enabled.”

“Nearly all devices a consumer owns will have a screen that is video capable and connected to broadband.”

“We predict that in 2020, the value of bundling content (channels) and services (such as broadband, telephony, and TV) will still be the greatest opportunity for TV service providers.”

“What these content bundles constitute – and who provides the content to the service provider – will need to be transformed and adapted. However, this remains a very strong opportunity for PayTV, despite the competition.”

“We believe that every player should adopt OTT or IP-based delivery. If new entrants can build successful online video businesses based on adaptive streaming, so should all other players. The longer term future for all video delivery is IP.”

“By 2020, we predict that 50 percent of all content consumed will have shifted to on-demand and time-shift, leaving the remaining half live and linear.”

“This is driven by both an increase in the amount of content consumed on new platforms and migration of the “non-live content” over linear TV toward on-demand or time-shifting platforms.”

Castle says the internet era of TV brings new entrants that can leverage connectivity and provide new services offering content to consumers.

“We have seen the rapid rise of Netflix, Amazon Prime launching new services and original content, and Apple offering more content on Apple TV.”

“Then we anticipate considerable global activity as all players in the value chain look to expand their position.”

“They will challenge the content offers of the existing players, bring huge investments in exclusive content, and leverage their ecosystems to their advantage using the devices, apps, and vertical ecosystems.”

“The good news is that our industry is growing well overall. We also foresee that while new entrants such as Netflix are growing with CAGRs of 20 percent, their modest revenue means that the bulk of the value will continue to be in what we call traditional media.”

Anticipate more technology changes

Castle says these changes signal a dramatic increase in mobile video and network traffic.

“The dramatic increases in network performance will continue. We predict that mobile video traffic will rise 13-fold by 2020, and that more than 50 percent of mobile network traffic will be media by 2020.”

“Video will also become increasingly important as a primary form of communication, further boosting video usage.”

“The media experience will converge. This is already happening through different vertical media ecosystems.”

“These ecosystems will become increasingly important in providing a unified and converged user experience.”

“The large ecosystems will also benefit from deep insights originating from personal information and big data generated within them, helping them to further improve, personalize, and target their offerings and services.”

“The need to stay relevant in an increasingly competitive and personalized landscape will put new demands on change and implementation speed and efficiency.”

This, along with cost-efficiency and new consumer requirements, he says, is also triggering a shift from hardware-based, to software-based solutions. This will also trigger many service providers to further rely on managed services for parts of their operations.

Castle says these changes, including shifts in technology such as the cloud and the move toward IP, UHD, and next-generation networks will rapidly transform the industry and pave the way for new media experiences and media players.

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