Datamonitor expects the global television broadcast market to undergo significant revenue growth, from $284.1 billion in 2007 to $326.2 billion by 2010, according to a Datamonitor report, “2008 Trends to Watch: Media and broadcasting technology.”
However, that growth can be achieved only through revenue diversification from value-added and bundled services, including internet service provision, HD content, on-demand solutions, interactive applications and multi-platform distribution, the report qualified.
“From personal media players (PMPs), to TV sets, to mobile phones, people will access media content on a variety of different devices over a multitude of communications networks,” said Datamonitor Media and Broadcasting Analyst Chris Khouri, author of the report. “As such, broadcasters are faced with strong pressure to adapt to multi-platform entertainment provision.”
In 2007, broadcast revenues in the US totaled $132.4 billion, and in Europe $72.8 billion, Datamonitor estimates; in each case, the bulk of revenues is from advertising: US, 58%; Europe, 43%.
Together, the US and Europe accounted for $205.2 billion in TV revenue – more than 70% of the worldwide total, according to Datamonitor’s figures.
Digital TV adoption, particularly IPTV and cable services, will grow in both the US and Western Europe, the report forecast.
There were around 149.5 million households subscribing to a digital television service in Western Europe and the US in 2007, Datamonitor estimates, and of those:
- Digital cable services accounted for a 32% share.
- Satellite’s share was 43%.
- Digital terrestrial television (DTT) accounted for 22% and IPTV around 3%.
By 2010, some 193.5 million households in the US and Western Europe will be connected to a digital television service, the report forecast:
- In terms of absolute growth, the two largest gainers will be DTT and digital cable growing by an estimated 13.3 million and 14.5 million households, respectively.
- In terms of market share, IPTV and DTT will show the strongest percentage growth with a 2.7% and a 3.7% increase, respectively.
Diversified Revenue Streams
To tackle continued threats of piracy, declining advertising effectiveness, the entrance of non-traditional competitors and audience fragmentation, broadcasters are diversifying their revenue streams, Datamonitor said.
“Advertising has been a steadfast revenue generator for the broadcast sector,” said Khouri. “However, as consumption habits transform and consumers utilize multi-platform channels as well as on-demand and time-shifted viewing, traditional revenue generation models are losing their effectiveness to bring returns. Broadcasters therefore will need to look to a variety of diversified revenue streams to bolster income.”
Datamonitor cited the UK as a prime example of diversification models with broadcasters obtaining significant revenue from non-traditional broadcast sources including TV shopping, interactive services, pay-per-view and program sales.
About the report: Datamonitor’s “2008 Trends to Watch: Media and broadcasting technology” outlines the trends that will challenge the broadcasting sector over the coming year. They include shifting consumer habits, revenue diversification, multi-platform distribution and addressable digital ad insertion. The report describes the market issues, strategic implications and technological adoption for players in the broadcast sector. The report outlines key business trends as well as highlighting broadcast revenue make-up for broadcasters in 2007.