UK television industry executives expect both online video pay and advertising revenues to quadruple by 2020, according to fresh research unveiled today by leading management company Red Bee Media.
Quizzing executives from across the UK television industry about their predictions for business models and revenue streams in 2020, the study found that more than three quarters (78%) feel positive about the industry’s financial outlook, predicting growth both in traditional and new revenue streams.
At the same time, they expect increasing competition for the revenue – with internet and technology companies predicted to be the biggest challengers.
“From talking to the industry, it’s clear that technology and internet businesses are fast becoming significant players,” says Bill Patrizio, CEO of Red Bee Media. “The question we need to ask ourselves is whether the innovations brought by these new entrants are going to sustain or disrupt our industry in the years to come. Will the internet be the industry’s friend or foe? And what role will regulatory bodies play in determining the impact and pace of change? If the last ten years have seen the convergence of broadcasting with broadband, it’s likely that the remainder of the coming decade will see a collision and competition between business models driven by consumer demand and expectation and changing patterns of media consumption. Media companies will have to fight hard and innovate in a fast changing, technologically driven landscape if they are to make the most of this flourishing market”.
The survey’s participants predict that annual revenue from online advertising will quadruple by 2020, increasing by 320% from 2010. Meanwhile, non-traditional revenue sources are expected to become increasingly significant with 58% of respondents predicting that product placement and ad-funded programming will become important income streams.
At the same time, around two thirds (64%) believe that the growing influence of digital gatekeepers such as Apple, Google, Amazon and Facebook represents the greatest challenge facing their company through to 2020. Online video aggregators such as YouTube are expected to benefit the most from growing advertising revenue, with 67% expecting these players to have the greatest success at growing their share of revenue. And traditional broadcasters are expected to go head-to-head with internet and technology companies for content rights – with 72% of respondents predicting that competition for premium content will intensify dramatically by 2020 as more companies seek to acquire rights.
The findings form the latest instalment in Red Bee Media’s Tomorrow Calling programme, which combines a series of think tanks, quantitative and qualitative research, one-to-one interviews, live panel debates and white papers – all used to build up a picture of the media world in 2020, including its technological possibilities and market dynamics.
