Since the early 1960’s New Zealand has enjoyed “free to air” (FTA) Television services. Globally this was the foundation model for the launch of television.
In some countries FTA has stood the test of time; while in others, viewer options have been augmented by state funded TV (BBC), Pay TV, and Cable/Satellite TV systems (in the USA). Now we have ‘Internet TV’ to consider as well as other TV delivery platforms.
“Free” may have been the case very early on; however, TV quickly became commercial. Producers and service providers saw the marketing potential of TV and, rapidly, television advertising became a multi-billion dollar per year global business.
Advertising revenues became the main income stream of most Broadcasters, and ‘paid for’ advertisements filled the spaces in and between programs to keep the viewers watching those advertisements.
The idea that all content on the Internet should be free seems like a great idea – to viewers. But what happens to the FTA business models, the Pay TV providers, and even the content producers themselves?
Without a large audience, the FTA and Pay TV operators have no business. Therefore, they are abandoned by the advertisers. The broadcasters can no longer buy the entertainment programs from the producers, so the producers need to find other revenue sources or stop making content.
Moving everything online might seem logical, but if all the good studio produced content is free why would advertisers bother following them to the online space?
And by the way ... who is going to pay for all the Internet capacity and reach upgrades needed to carry that increased traffic?
As long as advertising can be wrapped around studio produced and desirable content by broadcasters, and illegal program downloading is stamped out, TV broadcasting will survive and provide viewers with their favourite content on multiple FTA and/or Pay TV platforms – be they terrestrial, cable, satellite, internet-based, fixed, portable, via gaming devices or fully mobile.
Analysys Mason has produced a series of interesting articles on “The future of the TV industry”. Follow these links to view:
The future of the TV industry – a series of perspectives
The future of TV – the arrival of the Internet
The future of TV – rethinking linear TV
Online video is getting cheaper
Comments
Post has no comments.