Will over-the-top (OTT) television be the death knell for traditional television?

Is the era of linear television broadcasting over? Do the OTT stars have a bright future ahead of them? There’s no doubting that watching television and changing the channels is a thing of the past. Mobile content consumption is the new standard, and the future is digital.

Meanwhile, ‘cord-cutting,’ which the cable industry long regarded as a myth, is now seen as a significant threat. The number of households having pay television peaked at 105 million in 2010 but has since declined to around 82.9 million (Variety). According to eMarketer, by 2023, the number will have dropped to 72.7 million. Now it’s the turn of traditional television to be on the ropes, struggling for its existence.

The cable used to account for a significant amount of the media and entertainment industry’s revenue. The conglomerates profited from the huge networks, which is why the parent corporations were eager to diversify their channel portfolio. When Disney bought ABC in 1995, the primary prize was ESPN. Cable distribution had become so profitable by 2001 that Disney paid $5.3 billion for Fox Family Channel, which had been rebranded as ABC Family before becoming Freeform. When CBS and Viacom split in 2006, Viacom was seen as a safer investment option due to its channels.

Video streaming will become widespread, according to Netflix CEO Reed Hastings, and will be the preferred method of watching television, with cable and traditional channels adapting or dying in the process. He also expects that everyone will be viewing television through the internet in the next 10 to 20 years.

The fourth generation of television is about to begin. There was black and white, then color, and now we’ve reached the end of the satellite period and are entering the era of internet television. In the future, the content will be distributed via OTT (over-the-top).

Is linear television doomed?

Not everyone believes the set-top box will make it through the shift. Suranga Chandratillake, the founder of Blinkx, a video search engine and aggregator, believes that, like now, every device will come with an internet connection as standard. We can safely conclude that set-top boxes are a passing novelty at this time.

Traditional television networks’ collapse is being exaggerated, according to Rob Hodgkinson, chief operating officer of TVPlayer (owned by A&E Networks). Enders Analysis estimates that by 2025, broadcasters’ output will account for 80% of UK watching.

It’s difficult to find the perfect stuff to watch on OTT services. The long-term goal is to create a cross-platform universal search bar as well as a data-driven content recommendation engine. Viewers have a hard time deciding what to watch and can spend hours going from one platform to the next.

Whether it’s sports, talent shows, or soap operas, traditional broadcasters tend to have a stronghold on consumers who prefer to watch locally produced live television. The most costly, dramatic, and large-scale shows, on the other hand, will be made for the internet.

Is it possible for OTT and TV to coexist?

Because of the rise in demand for over-the-top (OTT) services, the future of broadcasters has been highly debated. Because of the large number of underserved homes in developing countries, television still has room to grow. While the media and entertainment ecosystem’s stakeholders are certain that television will not go away anytime soon, they also agree that broadcasters must rethink their strategy.

OTT distinguishes itself from traditional television by providing a high level of customization and segmentation, as well as the opportunity to find material at one’s leisure. That isn’t likely to change anytime soon. It will be demanded more and more by consumers.

Now the question is: how can broadcasters defend their land in such transformative times?

The majority of people feel that linear television will continue to exist. People still desire the pleasure of sitting in front of the television with their family in the evening. Furthermore, many individuals believe that in the next ten years, OTT and TV will coexist. In nations like India, watching TV with three generations and speaking is relatively common, and as a result, television consumption will continue to rise in the country.

Consumers are now comparing the content quality of TV and OTT platforms in the wake of continuous developments in the M&E industry, so keep that in mind. As a result, TV networks will need to change their strategies to deliver programming that is as interesting on linear TV as it is on OTT.

What does the future hold for sports programming?

Different media and entertainment businesses have different business methods, but their goal is the same: to buy the rights to sporting events to attract people/users to their platforms and transform them into economic assets. Some questions are, “What is the greatest approach for becoming a significant sports media network/player in ten years?” and “What is the best strategy for becoming a large sports media network/player in ten years?” Will solely on-demand sports material be available? ‘Will the owners of the rights become into media platforms themselves?’ is a question that has yet to be addressed.

There has never been a more exciting time in sports media, with so many different approaches: the emergence of rights holders OTTs following the strong American-led movement of the NFL, NBA, and UFC; the sports vertical strategy Discovery appears to be realizing in golf and cycling; heavy investments in DAZN (the world’s first truly dedicated live sports streaming service), also known as the ‘Netflix of sports’; Disney’s attempt to deliver premium sports content an OTT; Disney’s attempt to deliver premium sports.

One conventional sports media brand in the United States has already made the shift from linear TV to OTT: ESPN is currently balancing keeping a strong traditional TV brand while also providing a unique offering for all internet users with its ESPN+ offer. With its OTT service, ESPN has created a significant digital footprint in a short length of time, surpassing the company’s ambitions by 2 million members.

There are a plethora of innovative ways to attract viewers in the sports media landscape, and traditional broadcasters, with their expertise and vast knowledge, can build a plethora of excellent offerings to reclaim their market share in this battle to win the audience — they just need to take a chance and look ahead. The route forward should be to make use of existing digital infrastructures, try to be content pioneers, and develop solutions that benefit both the viewer and the M&E sector.

Conclusion

The entertainment behemoths are attempting to walk a fine line between old and new media, as they stake their bets on their new OTT platforms, which include Disney Plus, HBO Max, and Peacock, which have all recently launched. Will linear television, on the other hand, finally become obsolete? The industry has begun to see a downward trend that appears to be unstoppable. M&E organizations are always analyzing market developments and re-aligning their strategies as a result. By 2022, 55.1 million people will have stopped watching traditional pay television (Crawford).

While the cable industry’s narrative has changed dramatically toward the internet in recent years, the fact remains that cable is rapidly losing television subscribers. Cable companies have lost 4 million customers in the last two years, according to Moffett Nathanson, as their combined market share has plummeted from 51 million in 2018 to 47 million in 2020.

Prof.Muzammil
Assistant Professor,
DSCE- MBA

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