The linear television ecosystem is being disrupted by the rise of digital video services that offer a wider range of content type and greater freedom to choose how to view. In the UK, linear television viewing has fallen between 3 and 4 percent YOY for the last few years, and that trend shows no signs of slowing.
Speaking at the Financial Times’ Digital Media event in London 2015, BSkyB’s group director of strategy Mai Fyfield argued that, despite those falls, broadcasters who have traditionally been seen as primarily linear only are in a strong position to take advantage of the multi-platform world:
“We’ve launched a new brand called NOW TV…a standalone OTT service that is a way to grow our customer base. It’s a way to tap into [freeview] homes. It’s plug-and-play, it’s very flexible. [Our] strategy is all about that combined, segmented strategy.”
To that end BSkyB is increasingly diversifying from its old linear model, into offering digital video across different platforms and in different forms, such as its NOW OTT service. It’s a strategy that Fyfield argues is paying dividends:
“We’ve seen it as a huge opportunity. We’ve tranformed the viewing experience we’ve given our customers. We’ve been connecting boxes at a rate of 50,000 a week. We’re now in a position where 7 million of our customers are able to watch high quality linear channels, [but] they’re also able to watch content on multiple platforms.”
Expounding on her belief that linear television will be around for quite some time in the UK, Fyfield argues that the culture of cord-cutting that exists in the US – and which is often attributed to the coincidental rise of OTT services – simply doesn’t exist in the UK. Citing the comparatively higher penetration (around 80-90 percent) of pay TV channels in the US, and the higher prices those subscriptions command, she argues that there is less incentive for consumers to cancel their subscriptions to linear TV services in the UK.
By contrast, Suranga Chandratillake of Balderton Capital believes the end of dedicated linear television is likely to come sooner than later. He argues that the reason for a gradual rather than absolute decline in linear television consumption habits is exactly that – habitual, born of a reliance upon technological limitations:
“I think linear tv will, to a great extent, die. Why is TV linear? I think the reason TV linear is because the technology…forced us to have linear. I think [linear] video was the only way you could fit all the content there.”
That was a view backed up by Ed Lee, vice president of content acquisition at Roku, which provides a platform for streaming services he describes as an operating system for television. He believes that the sheer economics of streaming mean that linear television is likely to be eclipsed:
“From the streaming perspective, one of the basic tenets is that we believe ultimately all content will be streamed. It’s much more cost effective.”
He cites the example of CBS, whose OTT service now offers a back catalogue of programmes which it has previously broadcast on linear television, saying “when you think about all of these silos of programming that exist on their own they don’t really amount to much for a business” – but offered all together on a streaming service, they suddenly have a value far beyond that they could have on a solely linear model.
But while the panel disagreed on the likely lifespan of linear television, both Chandratillake and Fyfield believe that linear has one great advantage over the likes of on-demand streaming services – content discoverability. Chandratillake explains:
“One of the biggest problems on demand hasn’t solved is the serendipitous discovery matter. Amazon hasn’t solved that problem yet. Netflix has the same issue. There are some really interesting things about linear tv has done really well.”
That’s a relatively minor issue, and one that Netflix and other OTT services are making moves to solve, by attempting to recreate the serendipitous discovery through social recommendations that linear television used to rely upon. So while linear television might have different lifespans across different territories, the consesus is that broadcasters must diversify away from linear, as BSkyb is attempting to, in order to survive.