Five potentially disruptive forces facing the TV industry

Deloitte has identified five major forces for change impacting the global television broadcasting industry: big data; the second screen; spectrum allocation changes (in Europe); the commercialisation of ultra high definition TV and the emergence of the connected television receiver.

It has elaborated its views on these forces in its report 'Survival of the fastest: TV's evolution in a connected world', produced for the IBC Leaders' Summit 2013.

Big data - or more correctly, data analytics - is the process of gaining useful insights from large disparate data sources. It is having major impacts on many industry sectors, and television is no exception. Deloitte says there are many possible applications in the television industry but has identified three that it sees as being particularly important: capturing, quantifying and optimising TV's impact on online behaviour; as an input into programme making; and increasing the value of television advertising through 'addressable advertising'.

On the 'second screen' question, Deloitte says the triptych of laptop, smartphone and tablet has evoked consternation and excitement in equal measure in the television sector. The concern is that alternative viewing methods will divide the attention of users, with TV losing out. The glee is at the opportunity to exploit the second screen to television's advantage, for example by driving up levels of engagement with TV programmes.

Deloitte's view is that, in Europe at least, there is little sign of either of these outcomes so far. "Despite the buzz, the fear and the excitement, and although the installed base of second screens has widened and deepened, there has been only minimal impact on TV. Few key performance indicators, such as viewing hours, industry revenues, advertising performance and profitability, appear to be directly affected, positively or negatively, by the rise of the second screen…

"The increase in second screens across Europe has caused barely a ripple in TV behaviour, at least so far. Second screens - which currently number hundreds of millions in Europe and which in the medium term are likely to exceed a billion - have not dented TV viewing, have not blunted TV advertising and have not damaged pay TV."

Deloitte's view on Ultra HD, or 4K, TV is interesting. Without doubt all the pieces are in place for it to take off. "There is an existing library of 4K content, TV sets are becoming more affordable, new TV programmes are being shot in 4K, and tests of 4K transmission have been successful." Yet, it concedes that few people will need 4K. "The main challenge is that the much higher resolution afforded by 4K is immaterial, as viewers cannot appreciate it. The further the distance from the TV, and the smaller the screen, the less the perceptible difference between 4K and standard HD."

Deloitte's expectation is that the first owners of 4K TVs are likely to invite friends and family to view some 4K footage from close proximity. "They may be asked to try and spot pixels. This experience - should individual pixels prove impressively elusive - is likely to provoke admiration and envy, and possibly catalyse further sales."

The connected TV is another trend whose potential impact has been over-rated, in Deloitte's view. It acknowledges that connected TV was one of the hottest topics at industry conferences and in boardroom discussions during 2012 and 2013 but says fears it will result in broadcast content losing out to online delivered content are largely unfounded thanks to the variable quality of online content and the multiplicity of options available for delivering Internet video to the television screen.