shutterstock_216876970

Is the future of TV really already here?

Please let me congratulate you – according to a significant number of industry experts and market players, the future of television has now arrived. Moreover, a real technological revolution has occurred right in front of our happy contemporary eyes, which in fact has put paid to the satellite television development in Russia and across the globe.

They say that:

  1. Russian audience views TV less and less, giving preference to other forms of digital content consumption by using the Internet.
  2. Internet environments are considerably more attractive to advertisers than traditional TV.
  3. The audience of the nonlinear television entirely refuses to watch linear broadcasts.
  4. In the near future TV will completely become extinct with the development of broadband service access.

In the meantime, analyzing sales figures of digital set-top boxes from the General Satellite brand, which have been growing for several years in a row and annually amount to roughly 3 million units, there’s a growing sense of inconsistency of what really happens in the market and what people say about it.

It seems that we observe another soap bubble, similar to the 2000s collapse of the Internet companies bubble or the substantially overvalued commercial potential of various social networks. We are witnessing a familiar situation for markets associated with new technological mass applications. While the industry’s community speaks about the actual victory of the Internet technologies that systematically destroyed satellite TV, satellite operators continue to report success and progress, which accounts for millions of subscribers and billions of rubles of revenue. These indicators grow year by year not only in Russia, but in the reportedly “advanced” nations of Europe and the United States as well.

The amount of time viewers spend watching TV is increasing across the globe, while the index of “air” linear viewing within that total TV viewing volume still exceeds 90% and doesn’t expect a downturn trend.  We should note that today’s statistics is merciless, where the share of OTT operators in general television viewing is minimal, and the relative gains of viewers of linear and non-linear TV viewing remain quite comparable.

Television advertising within linear viewing keeps steadily being the driver of every single market. Even those who use advanced television services with the possibility to minimize television advertising have continued to watch it practically in full. According to Delloite, foreign chefs that present their own TV shows sell 10 million copies of their recipe-books more than their colleagues. And their number of comments in social networks gathered from their TV shows amounts to billions and continues to grow.

Today, by exploring consumer preferences development and through interacting with our Russian and international business partners, we can clearly say that linear TV won’t die just like radio, cinema and libraries haven’t. In fact, the question of “What will replace linear TV?” isn’t even included on the agenda.

Currently, the essential question is how technology and the corresponding business models of television evolve in the near future? All the companies that are related to the TV market one way or another, are all seeking the answers to this question and finding them through a variety of market offers. Russian companies and individual investors habitually tried to adapt apparent successful foreign business models to Russian realities. But today it has become more and more evident that the West and Russia have both failed to develop a revolutionary technology and a business model, doomed to success, which could potentially massively replace satellite TV, providing the viewer with indisputable and unanswerable value.

Television is primarily a mass market and mass service. Thus, it’s a complex and unmanageable task today to offer such a breakthrough technology and business model in order to meet the requests and demands of the majority of consumers residing within the territories from Kaliningrad to Vladivostok in both large metropolitan cities and small town villages at a variety of age and income levels. At this stage of market development, we believe it’s crucial to enunciate the following thesis: “The technological revolution in the broadcasting market won’t occur, but technological evolution is inevitable.” It’s a source of additional revenue for market players and even more diverse ways to meet the growing needs of the audience.

We believe the future rests upon technological synergy with advanced satellite broadcasting features. The future belongs to satellite operators, whose services are used today by the majority of active viewers not just in Russia but also globally. The number of such subscribers will continue to grow, and it’s not incommensurable with subscriber bases of OTT broadcasters. In this regard, I suggest that the strategic initiative and leadership potential should be reserved for satellite operators as the authors of successful business models, and for equipment and technological developers, as the founders of successful technological solutions in this area.

The next decade or even the next five years will host the struggle for the proper convergence, correct technological synergy and the synergy of respective business models. We believe the search for a new model of television viewing will lean “towards each other”: OTT providers will try to make television more “non-linear” by retaining all the benefits of emerging broadband access, while satellite operators in the near future will commence using unlimited possibilities of the Internet and related online services.

We are certain that the global TV market has yet to pass new key stages of technology and business model development, so we anticipate very interesting and exciting things are ahead!