LONDON: Traditional broadcasters in the UK could, collectively, lose £1bn a year, if the increasingly powerful tech players, Amazon, YouTube, and Facebook, become dominant players in UK TV, a new report suggests.
According to OC&C Strategy Consultants, the authors of the report, TV could go the way of industries such as insurance and music, as tech giants come in as powerful middlemen, carving away a chunk of revenue.
The consultancy based the loss figure – £1bn, the industry’s current annual broadcasting profit – on the proportion of revenue that aggregators have taken from other industries, from up to 10% in insurance, to 20% in the taxi sector with Uber.
The authors argue that broadcasting could fall into the hands of a handful of “super-aggregators” who would effectively become gateways for consumers looking for a way to access a range of content, The Guardian reported.
“Viewers are facing a complex web of different routes to access TV content, leading to an unsustainable level of confusion and inconvenience,” says Mostyn Goodwin, partner at OC&C.
Over a fifth of under-35s use more than seven separate services to watch TV content, OC&C reported, with 40% saying that the choice is confusing. “This environment is giving rise to the need for a super-aggregator service that provides a universal access point to content”, Goodwin added.
“This is not theoretical, in other industries we have seen how powerful these aggregators can become,” he continued.
As well as Amazon’s incursions into original content, followed by the acquisition of live sport, the service also offers a number of live channels to the subscription package, including ITV, the UK’s biggest and most popular commercial TV station.
Meanwhile, Facebook’s Watch launched earlier this month, intended as a rival to YouTube’s subscription platform, Red, in a sign that the trend will intensify in the medium term.
Though there may be little change in the short term, Goodwin said, over time, “as they grow scale, the nature of the deals can change. What choices the broadcasters make now will define what scale of ‘problem’ they will face.”
According to OC&C Strategy Consultants, the authors of the report, TV could go the way of industries such as insurance and music, as tech giants come in as powerful middlemen, carving away a chunk of revenue.
The consultancy based the loss figure – £1bn, the industry’s current annual broadcasting profit – on the proportion of revenue that aggregators have taken from other industries, from up to 10% in insurance, to 20% in the taxi sector with Uber.
The authors argue that broadcasting could fall into the hands of a handful of “super-aggregators” who would effectively become gateways for consumers looking for a way to access a range of content, The Guardian reported.
“Viewers are facing a complex web of different routes to access TV content, leading to an unsustainable level of confusion and inconvenience,” says Mostyn Goodwin, partner at OC&C.
Over a fifth of under-35s use more than seven separate services to watch TV content, OC&C reported, with 40% saying that the choice is confusing. “This environment is giving rise to the need for a super-aggregator service that provides a universal access point to content”, Goodwin added.
“This is not theoretical, in other industries we have seen how powerful these aggregators can become,” he continued.
As well as Amazon’s incursions into original content, followed by the acquisition of live sport, the service also offers a number of live channels to the subscription package, including ITV, the UK’s biggest and most popular commercial TV station.
Meanwhile, Facebook’s Watch launched earlier this month, intended as a rival to YouTube’s subscription platform, Red, in a sign that the trend will intensify in the medium term.
Though there may be little change in the short term, Goodwin said, over time, “as they grow scale, the nature of the deals can change. What choices the broadcasters make now will define what scale of ‘problem’ they will face.”
Data sourced from the Guardian, WARC; additional content by WARC staff
