January-February 2016 NEWS & VIEWS 9
IABM : Outlook for 2016 remains positive
While predicting widespread success for Netflix , Ovum does not expect OTT distribution to replace traditional TV anytime soon .
Netflix does not represent the end of traditional TV distribution
LONDON – As Netflix continues to create its “ global network ” to add to the 190 markets around the world it currently is available in , the impact will be felt for a generation to come , and will herald the start of a new era of online streaming and Internet TV , said global technology research and advisory firm Ovum .
Tony Gunnarsson , senior analyst , TV and OTT video , Ovum , described Netflix as “ one of the biggest moves in home entertainment , perhaps since the launch of the DVD , and a major milestone in the evolution of video and home entertainment ”.
Ovum expects Netflix to more than double its current total global subscriber count to approach the 200 million mark by 2020 , as its international business surpasses its domestic operation in terms of subscriber numbers .
However , it is premature to call time on traditional TV distribution , stressed Gunnarsson . “ Nothing happens overnight ,” he explained . “ Contrary to popular perceptions , consumer habits actually change remarkably slowly . If Netflix will prove successful in all new markets , it will still take years to build the level of subscriber numbers it has in Western Europe and Latin America .
“ Let ’ s not forget that Netflix is not a new business . It has been around for 20 years and it will be another 20 years , perhaps longer , before the world transitioned from traditional TV to over-the-top ( OTT ) distribution .”
GLOUCESTERSHIRE – Although many IABM members are facing challenging market conditions that are resulting in a decline in sales and profits , the outlook continues to be positive , with confidence high in many regions .
According to the recently published 22nd IABM Industry Trends Survey , the majority of IABM members are adopting an optimistic view for 2016 , which is likely to represent a key year for some broadcast technology vendors as a high number of important events may facilitate a temporary financial recovery .
Compared to the last survey , 37 % of respondents see things continuing about the same as they are now , 18 % predicted a deteriorating situation , and 45 % see an improving outlook in 2016 .
Various trends are driving overall industry change , IABM reported . From a business perspective , the shift from Capex to Opex continues to gain traction among end-users , as an increasing reliance on services , outsourcing and consumption-based technologies to improve operational efficiency allows end-users to focus on content creation .
In this light , IABM suggested
Exclusive content key to pay-TV growth in MENA region
LONDON – Legitimate pay-TV operators in the Middle East and North Africa ( MENA ) are increasingly relying on exclusive content right to gain subscribers , according to a new report from Digital TV Research .
Simon Murray , author of the fifth edition of the Digital TV Middle East & North Africa Forecasts report , said : “ Gaining subscribers in
the MENA region is no mean feat as piracy remains rampant in most countries . More than half of the region ’ s homes receive free-to-air satellite TV signals . Furthermore , established pay-TV operators now have to compete against new platforms as several IPTV operators put greater emphasis on subscriptionvideo-on-demand ( SVoD ) than on traditional that Netflix constitutes the “ perfect example ” of how a typical broadcaster may look like in the future . Recently , Netflix shut down its last data centre and moved all its IT infrastructure onto the public cloud . This allowed Netflix to fully take advantage of the economics of multi-platform delivery — traditional broadcasters launching TV Everywhere offerings may imitate this approach in the next few years , IABM predicted .
Therefore , the move to TV Everywhere is favouring vendors providing solutions that suitably address the multi-platform monetisation challenges . This involves not only cloud technology but also predictive analytics technology , personalisation and conditional access systems , IABM added .
Consolidation on the demand side will continue to represent a problem as larger end-users are more likely to extract substantial discounts from vendors , in the process driving a natural wave of consolidation on the supply side of the market . With the past few years having produced a sizeable number of acquisitions , expect this trend to persist for some time , said IABM .
linear channel packages .”
Despite these hurdles , the number of pay- TV homes across the 20 countries covered in the report will double between 2010 and 2021 to 20.9 million . From the 5.40 million pay-TV homes to be added between 2015 and 2021 , 1.98 million will come from Turkey , 0.63 million from Uzbekistan and 0.59 million from Egypt .
Moving ahead , broadcast and media technology suppliers are advised to work together through partnerships and interoperability initiatives to make sure they follow end-users ’ changing purchasing behaviour . With events such as the Olympic Games , the UEFA European Championships and the US elections taking place this year , new investment in broadcast services and products can be expected , providing vendors time to access their strategies for the long haul .
In less developed countries , there will also be opportunities as many countries continue to switchover to digital broadcasting .
One sentiment reflected by the survey respondents is the continued evolution of IP within the broadcast industry , as encapsulated in the following comments : “ Overall shift towards IP-based distribution will drastically change the industry ; however , this will likely take longer than expected and will be a multi-year transition , rather than a step change … There is much more to this than just a move to IP ; it is all the new models that IP will enable .”
The shift in technology spending is clear ; it is the timing that is not , concluded IABM , adding that the supply side of the industry needs to keep up with the shift in product and service offerings that closely align end-users ’ changing requirements . This , IABM acknowledged , represents a difficult transition to go through , as it requires not only a change in business models but also a “ radical update ” in the broadcast and media technology skillset .
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