The UK’s communications regulator Ofcom last week warned that without radial interventions, traditional broadcasters are unlikely to survive. Ofcom said that this will require legal changes to support broadcasters, but also a speeding up of broadcasters own strategies to adapt to the new world.
But what steps do broadcasters in Europe need to take to ensure they’re sustainable in 2025. VAN spoke with some of the industry’s leading think to hear how they think broadcasters need to adapt over the next five years.
One thing to be mindful of is that in 2025, we’ll be operating in an ecosystem that is predominantly IP distributed. And when we operate in a market that is predominantly IP served, then addressability becomes table stakes. I believe, certainly in the UK, TV will continue to be a mostly ad-funded ecosystem. There are only so many SVOD services that people can sustain, so ad-funded models will continue to be the beating heart of the industry. And if at least one of the major SVOD services doesn’t pivot to an ad-funded or hybrid model by 2025, I’ll be gobsmacked – given the amount those companies spend, they can’t disregard ad revenue as a fundamental ingredient in the baking of the TV cake.
As regards to content, we’ll see a meaningful and material pivot to more digital-first commissioning structures from the broadcasters. I think there are a lot of valuable lessons that we are learning from the way in which Netflix and Amazon Prime engage with the production markets, and how they have structured release widows for their content. You look at the way those companies structure the episodic nature of their content, there’s always a hook in to the next episode to keep you watching, and they build narrative arcs across series to keep viewers interested. So broadcasters can learn about building those narrative arcs, and about windowing and release protocols.
Looking at data, we as a broadcaster industry need to get our act together in the harmonisation of our standards. That means creating a singular taxonomy around identity, and attributes associated with those identities. And it means ensuring we are clear and consistent in our communication with our viewers that data is an integral part of the television experience because without that data, we can’t do effective advertising, and without effective advertising we can’t produce and commission the shows they like to watch. Ideally, we’d have some form of unified ID that works across all the commercial broadcasters, so that we can create a more compelling and holistic experience for advertisers, who inevitably want to buy against an identity irrespective of the channel or the device that they may be on.
We’ll see development of the programmatic workflow, which obviously we’re underway with through Planet V. But what’s going to be really interesting is broadcasters’ appetite to fight the big Big West Coast tech businesses, and their determination to remain sovereign in the way that they package and sell and engage with the advertising market. I believe we can and should continue to operate in a way where we resist the short-term ‘price is everything, provenance is nothing’ types of auction-based mechanics which have disembowelled the rest of the media industry. What we’re finding at the moment with Planet V is that you can do programmatic without having to do auctions. The protocols exist which enable us to do real time decisioning, allocation and pricing for folks who want to enter a market with a certain set of audience segments. But you don’t have to go all the way to the auction-based approach.
I’m confident that we’re able to do that, because the industry still need surety. Advertisers need surety because they have a certain volume of communications that must be delivered over a certain period of time, to drive their KPIs, which means that they need pricing surety. And at the same time we need income surety. The lead time for a good piece of drama is 18 months, and that’s expenditure we have to make now – so we need surety around cashflow. And auction-based mechanisms can’t provide that.
Lastly, we need as a broadcast industry need to present ourselves in a more joined up, aligned, and cohesive way to the advertisers who have fallen out of love with TV. TV is still the preeminent channel for driving marketing outcomes. But the relationship between television and the marketing community has deteriorated because there have been louder voices in the market that have endeavoured to rewrite some of the narrative around marketing.
That’s not a call to arms for consolidation, though I think consolidation will inevitably be a factor. But we have to be we have to be speaking with one voice around the benefits and all the compelling components that make up the glorious platform media channel which is TV.
The ideal ad-funded broadcaster of 2025 will…
Continue to commission the outstanding UK content across a wide variety of genres that they instinctively understand and that we know people really value. This is a distinct competitive advantage over the global SVOD players.
Embrace different funding models for content, which could mean more co-pros for high-end drama, for example.
Be unarguably and proudly inclusive and representative both in front of the camera and behind, both in its shows and the advertising it carries. It’s not just the right thing to do, there is a strong economic case for it too.
Maintain the position of trust and brand safety they have built in the advertising landscape. Trust in advertising has been eroded in recent years. TV stands out for its high quality and highly regulated advertising environment. Owning this higher ground will become increasingly valuable.
Be an even better business partner to brands, fuelled by greater data and tech expertise. The commercial broadcasters are already working more closely than ever with brands to achieve the outcomes they need. The dawn of advanced TV advertising is accelerating this, with new opportunities such as customer data-matching and geo-targeting and lower barriers to entry.1000s of brands that would never have considered TV before are now enjoying what TV offers.
Be even more flexible. The increased flexibility around things like advanced booking deadlines for advertising during the pandemic was hugely appreciated by brands as it enabled shorter-term decision making. This is a trend that will continue.
Continue to win the effectiveness argument. There is an increasing culture of effectiveness in marketing with an even more relentless focus on business outcomes. This is good news for TV as TV is a business outcome machine. But as an industry we must continue to make and re-make the case for how and why TV advertising is so effective – ideally with even greater emphasis on category-specific proof, such as TV’s immense influence on driving ecommerce.
It’s an interesting time to think about how broadcasters will look in 2025, because the pandemic has accelerated a lot of the initiatives already started by broadcasters. But it has also reassured broadcasters of their position in the ecosystem. This year has seen a renaissance of the big screen, but also highlighted the importance of CTV and OTT services, and their place on the big screen.
I think there are several core attributes that a broadcaster in 2025 will have to have, and the first of those relates to content. In order to thrive five years from now, you’ll need to understand better than ever before the content that suits your target audience, in the cultural realm you occupy. The major advantage broadcasters have over big tech companies is their history. Broadcasters have always been in the business of looking for the attention of consumers, and doing that by focussing on the cultural relevance of their content, and the local rooting of that content.
So broadcasters will need to really understand their USP in the eyes of consumers, compared to the global media companies and tech platforms. We’ve seen during the pandemic, broadcasters are still best at providing those moments that unite families in front of the big screen, and that’s something that needs to be leveraged. In the future that will revolve more around OTT services from the traditional broadcasters, based on freemium access and subscription-based access. But capturing local and family-based viewing is key.
Sticking with content, I think the the fight for sports rights will increase. Obviously sports rights still need to make sense from a business perspective, we can’t let the prices for sports rights go too crazy, though the pandemic has pressed the pause button on that escalation. But the reality is that live content will play a major role for broadcasters. Then again, I think there are also opportunities in niche content, and highly localised content that is produced exclusively for broadcasters’ OTT services.
The next pillar is ease of access for advertisers. We think ITV’s Planet V is a step in the right direction, and I think the big European broadcasters will need to establish those sorts of products, to give pan-European access to inventory. The tech companies have got that right, and that’s their advantage at the moment. So in five years we definitely need to establish ways for agencies and advertisers to access our content and ad inventory much more easily. Obviously those products should be combined with data, and better targeting possibilities.
Finally, I think we really need to have solved cross-screen measurement by 2025. We’ve seen a lot of work on that from the WFA, but there are still lots of questions about attribution, and how we fairly weigh up the impact of different screens and services.
But as broadcasters, we have to find a way to offer advertisers a simple but effective way of measuring the impact of their advertising across screens, and across different viewing behaviour behaviours. I think with things like NBCUniversal’s CFlight metric, we’re seeing steps in the right direction. But we need to make sure cross-screen measurement is fair, and not biased towards digital or towards television.
Those three things – local and live content, ease of access to inventory, and cross-screen measurement, will be the holy trinity for successful broadcasters in 2025.