Gilles Fontaine, deputy CEO at Idate
Photo: Idate

[Via Satellite 09-30-2013] Idate Research believes the TV industry evolution is at a tipping point and predicts changes in viewer behavior and evolving business models as the new industry player hierarchy is now taking shape, according to its “Future TV 2025” report. The report, which is devoted to the future of TV and video distribution, identifies how current consumer behavior is shaping TV services for future years.

“This new report provides an opportunity to completely rethink the distribution models used for TV and video content, much in the way we believe content producers and providers, network operators and app stores are doing,” said Gilles Fontaine, deputy CEO at Idate, in a statement.

In the report, Idate outlines a “business as usual” situation. The scenario is characterized by key points including: live viewing partially overtaken by on-demand viewing, piracy that creates obstacles to the switch from physical to online viewing, increased competition in the pay-TV market, which affects prices, and ad rates for live TV decreasing while increasing for video on-demand (VoD).

Growth of video service revenue on fixed and mobile networks. Source: Idate

Based on this scenario, Idate expects the video market on fixed and mobile networks worldwide to grow by an average of 3.2 percent per year between 2013 and 2025, including an average of 2 percent growth for live TV and 14 percent annual growth for on-demand service. However, the market’s growth is expected to be significantly lower in developed markets. The average annual growth of Europe’s top five markets (Germany, France, the U.K., Italy, and Spain) is expected to stand at 1.6 percent from 2013 to 2025, with the live TV market (including broadcasters’ catch-up TV services) in decline by 0.7 percent, while on-demand services should experience an average annual increase of 18 percent, according to Idate’s prediction.

The three development scenarios for the TV market, 2009-2025. Source: Idate

Additionally, Idate outlined two alternative possibilities, which represent how the increased replacement or parallel use of live and on-demand viewing would affect the TV industry’s future: the music industry syndrome and the best of both worlds. In the former scenario, the video services market in Europe’s top five markets will shrink by an average of negative 0.8 percent a year, and not be balanced by on-demand services, including catch-up TV services that are expected to decrease by an average of negative 4 percent annually. The latter possibility puts average annual growth at 3.9 percent, including 2 percent growth for live broadcasting services.