The Future of TV: The evolving broadcast and on demand landscape

The analog switch off is planned for the next decade around the world, and the global TV market is going through a period of huge change. Digital TV in all of its forms – terrestrial, cable, satellite, IPTV – is booming. HDTV is becoming prevalent in mature markets, and technologies such as 3DTV and mobile TV are also set to take off. Consumer behavior and attitudes are shifting, with viewers increasingly expecting to access content wherever and whenever they want, on the device of their choosing. As such, Video on Demand (VoD) services are becoming ever more popular. All of these developments have encouraged new players to emerge in the TV space, meaning that business models are changing and incumbent operators must adapt to survive.

This report assesses the future of TV in all its forms, encompassing content, technology, consumer appliances and devices, mobile devices, evolving media and broadcast business models, the role of connectivity and mobility, and consumer behavior and lifestyle trends. It provides an analysis of the evolution of the broadcasting landscape, and outlines some of the emerging technology and demand trends, highlighting the market drivers and inhibitors that are affecting expansion and demand. The report focuses on the different broadcasting technologies, starting from the distinction between analog and digital, to then develop further in the different media channels and technologies of HD, 3DTV, IPTV, VoD and Mobile TV. The report tracks the evolution of each market, providing in-depth analysis of the whole market and its sub-markets, and includes market sizing and forecasts.

Key features of this report

• Overview of the market trends, technological evolution and changing business models that are driving the TV market.

• Market projections to 2014 for key communications and broadcasting services including consumer broadband and mobile broadband.

• Market sizing and forecasting for all key TV segments: Digital TV (inc. DTT, cable, satellite, IPTV); Video on Demand (VoD); 3DTV; HDTV; Internet enabled (‘connected’) TVs; Mobile TV.

• Examination of the evolving competitive environment and the ways in which various protagonists are targeting opportunities in the TV market.

• In-depth analysis of the strategies being employed by a number of leading content providers and device manufacturers with regards to their involvement in the online video and/or connected device markets.

• Insight into the future trends that will impact on the development with regards to PC/TV convergence, including identification of best-practice and emerging opportunities.

Key benefits from reading this report

• Gain a comprehensive understanding of how market trends are prompting broadcasting TV services, and the impact such developments and emerging technologies will have on traditional business models and strategies.

• Understand how the competitive environment is changing, and how content owners, broadcasters and device manufacturers will seek to gain a share of the spoils in the Television arena.

• Compare how different content providers and device vendors are positioning and developing their services and products in order to differentiate from the competition, gain market share and drive revenue growth beyond their core/traditional offerings.

• Understand how emerging technologies will likely to be matching consumer demand, and understand which future technology is best positioned for success.

• Identify future trends that will impact on the potential of TV market, and gain insight into how to best approach this rapidly evolving opportunity.

Key findings of this report

Digital TV over satellite and terrestrial broadcasts is booming, and integrated digital TVs are starting to become cost effective and are built in volume. The digital TV market has continued to be driven by picture quality, realism and connectivity in the home.

HD content creation is gaining ground worldwide. Regional markets such as Asia, Europe and North America have embraced HD and are actively driving its adoption and promoting the benefits. The TV industry is currently beginning a slow migration from analog to digital and to HDTV. Introduction of 3DTV will begin after migration to digital/HDTV, which will put large scale 3DTV deployment at least 5 years away. 3DTV compatibility standards, however, have not been set yet.

The online and broadcast markets are converging, with video services making the move to the PC environment and web-based services becoming a core feature of the TV viewing experience. Online video is no longer synonymous of low quality content. Broadcasters and film studios are increasingly distributing their content via internet services.

Mobile TV is a reality today and moving towards the mass market.
Asia Pacific is the mobile video dominant area, with the highest volume of mobile video phone sales. One primary driver for mobile video adoption is access to live sporting events, particularly soccer, cricket, and motor sports.

There is a fragmentation of standards for digital mobile TV broadcasting that is the way of the future.

Key questions answered by this report

• What are the major trends shaping and driving the future of TV?
• Why are broadcasters and rival content providers investing so heavily in the deployment of HD and 3DTV services?
• Which factors are likely to inhibit the pace of PC/TV and mobile/TV convergence market development and why?
• How are different market protagonists targeting the opportunities afforded by PC/TV convergence?
• To what extent will emerging online services threaten the current status quo across the video distribution market?
• What are the forecast market growth rates to 2012/2013 across underlying technologies?
• How will the market for converged video services evolve, and which future trends will impact on developments over the course of the next 2-3 years?
• How will technology meet the demand for enhanced experiences, both in terms of quality and in terms of broadcasting systems?
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Table of Contents
The Future of TV
Executive summary 10
The evolving broadcast landscape 10
The consolidation of digital TV 11
The expansion of HDTV and the emergence of 3DTV 12
IPTV broadcasting and Video on Demand 13
Broadcast TV to mobile 14
Chapter 1 Introduction 18
Background 18
Scope of this report 18
Who is this report for? 19
Key definitions 19
Chapter 2 The evolving TV landscape 22
Summary 22
Introduction 23
Changing media consumption habits 23
Change is driven by consumers of all ages 23
Content type determines preferred consumption platforms 25
Telecoms consolidate their presence in the market 25
Growth in online distribution 25
Netflix’s subscription model proves successful 25
Free on-demand content and anti-piracy standards 26
New business models 27
Broadband adoption and its impact on TV 28
New opportunities and challenges 28
A ‘recession proof’ service 29
Broadband uptake 29
Competitive landscape 33
Global TV shipments 33
Global TV revenue 34
Revenue by funding type 34
Regional revenues 35
The impact of M&A on the media sector 36
Technology landscape 38
TV access modes 38
Digital TV and IPTV 39
Video on demand (VOD) 40
High-definition and 3DTV 41
Mobile TV 42
The evolution of TV 44
Chapter 3 The consolidation of digital TV 48
Summary 48
Introduction 49
Market overview 49
Technology overview 50
Better quality 50
Standard Definition 50
High Definition 50
Multicasting 50
Triple play bundling 51
Transitioning to new channels 51
Enhanced content services 51
Video on Demand 52
Market sizing 53
Digital TV penetration by region 53
Digital TV penetration by platform 55
The digital switch 57
Terrestrial platform take-up 57
Satellite platform take-up 58
Cable platform take-up 59
IPTV platform take-up 59
Chapter 4 The expansion of HDTV and the emergence of 3DTV 62
Summary 62
Introduction 63
Market overview 63
HDTV moving to LED 63
The emergence of 3DTV 64
HD and 3DTV technology standards 65
HDTV 65
720p 65
1080i 65
1080p 66
3DTV 67
3DTV challenges 68
Effortless viewing 68
Content availability 69
Infrastructure compatibility 69
Consumer electronics equipment 70
LED HDTV televisions 70
Advantages over LCD and plasma 70
OLED 70
3D Blu-ray players 71
LCD TV use for business purposes 72
Market sizes 73
HDTV shipments 73
HDTV penetration 74
3DTV shipments 75
Frame rate models 76
3DTV broadcasting pioneers 78
Conclusions 79
Chapter 5 IPTV broadcasting and Video on
Demand 82
Summary 82
Introduction 83
IPTV technology overview 83
IPTV network architecture 83
Factors affecting service 85
Quality of experience 85
Media Delivery Index (MDI) as a testing metric 86
Market overview 87
Opportunities for triple play services 87
Major studios move towards online TV 87
Online video accounts for a growing amount of data traffic 88
Broadband uptake 89
What IPTV must offer 90
The Video on Demand opportunity 92
Implications of Internet/TV convergence 93
Online advertising spend 93
Democratization of contents 94
Cable to be bypassed? 94
Two way convergence 95
TV on the Internet 95
The Internet on TV 95
Market drivers and inhibitors 98
Drivers 98
Inhibitors 100
Market sizes 101
IPTV subscribers 101
Internet video traffic 101
Conclusions 103
Chapter 6 Broadcast TV to mobile 106
Summary 106
Introduction: What is mobile TV? 107
Mobile TV technology standards 108
Mobile TV broadcasting standards 108
Unicast vs multicast 110
Market drivers and inhibitors 112
Drivers 112
The expansion of 3G and 4G subscriptions 112
3G mobile TV services 113
Asia represents the bulk of the demand 113
The emergence of new standards 116
Changing viewing habits – program length, location and demographics 116
Inhibitors 119
The market is highly regulated 119
Limitations of mobile phones 120
Too many digital broadcasting standards 120
Local mobile operators do not cooperate 121
Market sizing 122
Analog mobile TV in a digital era 123
Mobile TV subscribers 124
The iPhone’s impact on mobile TV 125
iPhone users accessing VOD 125
The iPhone does not support analog broadcast TV 126
Conclusions 127
Index 129
List of Figures
Figure 2.1: Essential network-based services (% respondents) 29
Figure 2.2: Broadband subscribers by region (m), 2009-2014 30
Figure 2.3: Global consumer fixed broadband subscribers by technology (m), 2009-14 31
Figure 2.4: Global TV shipments and revenue, 2009-2010 33
Figure 2.5: Global TV revenue by type of funding ($bn), 2006-2013 35
Figure 2.6: TV revenue by region ($bn), 2006-2013 36
Figure 2.7: Global breakdown of households by TV access mode (households, m), 2006-2013 38
Figure 2.8: The evolution of TV 44
Figure 3.9: Digital TV households by region (m), 2008-2013 53
Figure 3.10: Regional digital TV penetration (% of households with digital TV), 2009 54
Figure 3.11: Global breakdown of digital TV households by access mode (% of total households), 2008-2013 55
Figure 3.12: The digital switch - % point swings towards digital TV, 2007-2008 58
Figure 4.13: HD definition standards comparison 66
Figure 4.14: Global LCD TV shipments (m), 2008-2012 73
Figure 4.15: Share of global households watching HDTV (%), 2007-2012 74
Figure 4.16: Global 3DTV shipments (m), 2010-2015 75
Figure 4.17: Share of total TV sales by panel frame rate (%), 2009-2013 77
Figure 5.18: IPTV Systems architecture 84
Figure 5.19: Internet users downloading and watching video (% respondents), 2008 88
Figure 5.20: Global sales of Internet enabled TV sets, 2009-2013 96
Figure 5.21: Global IPTV subscribers (m), 2008-2013 101
Figure 5.22: Consumer Internet traffic, video to PC and TV (petabytes per month), 2008-2013 102
Figure 6.23: Mobile TV consumption chain 110
Figure 6.24: Global 3G and 4G subscribers (bn), 2009-2014 112
Figure 6.25: Regional mobile TV users (% of all mobile users), 2008-2009 114
Figure 6.26: % of consumers factoring mobile TV into mobile purchasing decisions, selected geographies, 2009 116
Figure 6.27: Monthly time (minutes) spent watching Mobile TV by age group, US, Q1 2010 118
Figure 6.28: Global mobile TV subscribers (m), 2009-13 125
List of Tables
Table 2.1: Broadband subscribers by region (m), 2009-2014 30
Table 2.2: Global consumer fixed broadband subscribers by technology (m), 2009-14 32
Table 2.3: Global breakdown of households by TV access mode (households, m), 2006-2013 39
Table 3.4: Digital TV households by region (m), 2008-2013 54
Table 3.5: Global breakdown of digital TV households by access mode (% of total households), 2008-2013 56
Table 4.6: Global LCD TV shipments, 2008-2012 73
Table 4.7: Global 3DTV shipments, 2010-2015 76
Table 4.8: Share of total TV sales by panel frame rate (%), 2009-2013 77
Table 5.9: Daily electronic activity while online (% respondents), 2008 89
Table 5.10: Global sales of Internet enabled TV sets, 2009-2013 96
Table 5.11: Consumer Internet traffic, video to PC and TV, 2008-2013 102
Table 6.12: Global 3G and 4G subscribers (bn), 2009-2014 113
Table 6.13: Regional mobile TV users (% of all mobile users), 2008-2009 115
Table 6.14: Monthly time (minutes) spent watching Mobile TV by age group, US, Q1 2010 118
Table 6.15: Comparison of cellular subscribers and ARPU generated by region, 2009 123
Table 6.16: Global mobile TV subscribers (m), 2009-13 125
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