The BBC recently celebrated the 75th anniversary of its first ever TV broadcast. After seven decades 90 per cent of UK viewing is still linear – we flop in front of the box and watch whatever’s on.
With Netflix poised to launch TV streaming services in the UK and Ireland early next year, this is set to change. LoveFilm, now a subscription service with 1.4 million members, will be stiff competition. So will Google be when it expands into film rental via YouTube, alongside Apple’s film and TV show rentals through iTunes. Meanwhile, broadcasters and cable TV providers like Sky, Virgin and BT increasingly offer on-demand services.
The really clever providers are already packaging up content and integrating social media to keep squeezing fresh value out of their offerings. In doing so, they follow in the footsteps of their counterparts in music and gaming. In the music industry, Spotify has recently allowed Facebook users to stream tracks – taking a leaf out of gaming’s book – in which freemium is increasingly popular. In this way, seeking to wrangle more paying subscribers through the mass exposure of social media.
Digitised spend on games and music is growing rapidly, soon expected to exceed dwindling physical sales. According to the Entertainment Software Association in the US, games sales in 2009 were 20% digital and 80% retail. Last year that figure moved to 24% digital and 76% retail.
In music, analyst firm Gartner predicts digital spend will increase to $7.7 billion in the US by 2015 while physical music backslides to $10 billion.
The actual box – the TV monitor – looks set to remain the central medium for consumers for the foreseeable future (Apple’s TV prototype demonstrates their conviction of this). However, forty per cent of smartphone and tablet users already “double screen”.
In response to this, Channel 4 is working on two pilots designed to integrate linear second screen viewing into social media and streaming. One allows viewers to select the length and depth of news bulletin they want to watch via their remote control. The other is a second-screen app for the channel’s current-affairs programme Dispatches. The Dispatches app runs across all smartphone and tablet devices, providing extra content and information related to the TV programme in real time. It’s integrated into Facebook and Twitter and includes a live voting feature.
Increasingly the apps themselves – with all the integrated advantages of both screens – will take the place of channels.
Show me the money
And so with TV viewing as well, making best use of all the devices in the room will keep viewers hooked, giving advertisers access to stable, consistent viewer numbers. Also, building further on the value of subscriptions and micropayment revenues generated.
The bottom line is that the digitisation of mainstream TV and film is not synonymous with free. By supplying convenience, engagement and value, rather than ownership, digitisation enables the provision of services and high quality content that people will pay for. Like Apple and Google, whose services profitably re-group online content, programme makers will get better at reaching out to audiences via all their devices. And the industry will be in position to price satisfaction and quality.