IABM releases Broadcast & Media Strategic Analysis report

Industry consolidation, a desire to strike direct relationships with viewers and the rise in popularity of streaming services are among the many trends highlighted in the report.  

According to its research, a sample of manufacturers and suppliers experienced a dip in revenue and profit. Some 39 companies were tracked following the revenues and profits for Q2 2018 versus Q2 2017.

Those participating saw -2.1% change in revenue and -0.1% change in operating profit. The report summarised: “These show a worsening in revenues and only a slight decline in profits compared to Q2 2017.”

The report concluded advertising revenues fell in 2017 due to an increase in competition and a lack of sporting events.

Declining revenues and digital flux are impacting buying and supply trends, content chain investment as well as having an effect on industry consolidations and acquisitions.

And the industry should be braced for further change, with the IABM report stating that “consolidation is growing, particularly in the US.”

Going direct to the consumer and investing more money in technologies to enable internet distribution is another trend driving change through the global industry.

“This is producing an industry disconnect between technology suppliers and media companies,” the report states.

“While media companies demand efficient, agile and flexible solutions – which can include product customisation – suppliers often find it costly and inefficient to provide them.”

The competitive landscape is prompting media companies to adopt efficient, agile and expansive business models and technologies to remain competitive.

Furthermore, organisations are moving from “media companies” to “media factories” where next-generation technology including cloud and artificial intelligence (AI) is enabling the expansion of content creation to maximise asset utilisation and increate the automatic workflow.

This change enables organisations to become leaner and responsive to market changes whilst remaining competitive in the growing “digital chaos”.

According to the IABM, “shifting demand patterns are disrupting the supply side of media technology, forcing companies to reinvent themselves.”

The search for scale is evident across the entire industry with billion-dollar acquisitions and bidding wars penetrating the big and small players.

Streaming first

According to regulator Ofcom the UK market now has more people subscribed to streaming video services than to traditional pay-TV networks.

The report stated: “This is a landmark for streaming, which is a worry not only for pay-TV operators, commercial and government-funded broadcasters have been feeling the impact of the viewership migration on their finances as well.”

Traditional broadcasters are responding to this industry shift, repositioning their brand and acquiring adjacent companies to offer a stronger competition to counter the streaming giants.

“Although margins are under pressure, the fundamentals of the industry remain strong” IABM said.

Establishing direct relationships is another trend to watch, according to the IABM, which referred to “the adoption of AI to drive personalisation and improve relationships with consumers”.

It said: “Many media companies have again built internal technology capabilities or partnered with specialists for developing consumer-facing systems.

“This is particularly true for pay-TV operators. Companies such as Sky, Comcast and Telefonica have all invested in AI to improve relationships with their subscribers.”