Are streaming services better than cable television
TV 2020 : Are you still watching - or are you already streaming?
Jeff Bewkes, CEO of the media empire Time Warner, was asked in 2010 if he saw a threat in the DVD mailer Netflix, which had just switched to streaming. His answer: “It's a bit like the Albanian army is conquering the world. I don't think that's a danger. "
For the next employee workshop, Netflix then procured 150 caps from the Albanian army, which all participants were allowed to wear for a whole weekend.
Netflix is already in fifth place among opinion-leading media companies in Germany, according to the diversity report of the media companies. And together with Amazon and its video service Prime, Netflix is at the forefront of an ever-increasing number of video-on-demand providers. In 2019, these platforms will generate sales of around 1.7 billion euros in Germany alone. After AppleTV + in November 2019, Disney + is the next top-class video platform waiting for March 2020 to further shake up the prevailing moving image conditions.
Everyone is talking about the streaming war, because after Disney and Apple, Warner and Amazon's IMDB (and some more) want to participate in the rapidly growing market with new platforms in 2020. Who will win the war in the end? The audience. Even if three subscriptions have to be taken out in 2020 instead of the previous average of two: There have never been so many exciting films and series. With the purchase of Champions League rights by Amazon, the sport comes along. Amazon and streaming specialist Dazn have for the first time ousted Pay-TV Sky in the race for football. The internet is starting to eat up television.
Is the old television "mouse dead"?
The good old television market is changing. The phalanx of the four major broadcasting chains - ARD and ZDF, RTL and ProSiebenSat 1 - which for many years provided 90 percent of the audience with content via satellite and cable, is being massively disrupted. The effects still seem manageable, but already today many TV managers are talking behind closed doors that the old television will soon be “mouse dead”. Video on Demand is more convenient to use anywhere, there is more exciting content and - at least with the subscription services - no advertising blocks. So there are weighty reasons why streaming simply seems better and more modern than classic television based on the broadcasting schedule.
The under 20-year-olds recognized this early on and already watch the majority of non-linear content. Meanwhile, more and more 30-, 40- and 50-year-olds are turning around and streaming as much as they can. In 2020 this trend will solidify and older viewers will increasingly “turn over” the streaming offers. If this development is continued, only 45 percent of all moving images will be used in the classic, linear way in 2022. For 14 to 29 year olds, the proportion will have melted down to a full eleven percent by then - and the trend will continue to fall. The question “Are you still watching TV?” Has long been expanded to include the question-answer “Or are you already streaming?”.
Because of the promising future, it is necessary that ProSieben and Discovery with Joyn and RTL with TVNow put in a lot of effort to also present their content non-linearly. But if you do this successfully online, you will lose viewers on traditional TV, for whom you could previously earn significantly more money with advertising than you can now with the app. A real dilemma. But change cannot be stopped. Public broadcasters are also expanding their media libraries, with more and more (fictional) programs experiencing their media library premiere before the actual broadcast date.
Good odds only for third parties
But what is becoming more permanent: The ratings for the private ones, for ARD and ZDF, but especially for the ARD third parties, are the ratings of the older generation. People in the last third of their lives are happy with the linear program. The others - and they will soon be the majority - are looking for the new worlds of experience at Netflix & Co, the diversity and equality of the worlds presented.
In addition to the large VoD platforms, YouTube, Facebook and Instagram as well as newer services such as Twitch, Snapchat and TikTok have established more and more social video offers that also provide their primarily young target groups with moving images. Again, the numbers are impressive. On YouTube alone there are 43,000 channels from German providers with more than 500 subscribers. Instagram counts 17 million monthly users in Germany, the video service TikTok already has 5.5 million mainly young users in Germany, almost a full coverage in the group of 14 to 19 year olds. The Amazon subsidiary Twitch, which so far has mainly been home to games streamers, is now much more interesting for many users than linear TV. No wonder that the advertising-financed part of this video market will turn over around 750 million euros in Germany as early as 2019. Ufa boss Nico Hofmann rightly remarked in the “FAZ” interview that the two markets, the traditional and the streaming market, “move very quickly and are converging”. The media libraries of the broadcasters and the streaming providers would be aligned in terms of their programs. And that which swims along in mediocrity will perish. In this event frenzy, the old top dogs from ARD to RTL and Sat 1 to ZDF have to create new attractions and strengthen old ones - and they also have to be careful. "Wetten, dass ...?" - Inventor Frank Elstner will talk for Netflix, ZDF all-purpose weapon Johannes B. Kerner interviews celebrities on Magenta TV.
Only live television still watches the clock
The current, expensive information business is still the public value of the public broadcasters, the casting shows are still the profession of the private. It can, it doesn't have to stay that way. The more the fictional, not least under the impression of Disney's entry into the market at the end of March 2020, almost always tries to overwhelm the same, the more the own, the special will count in the competition. What can no longer exist: the one path. The mobility and diversity of users will continue to break up the program schemes and then, one day not so distant, abolish them. Only live television will watch the clock.
The competitive pressure for the German broadcasters will remain high in 2020. The synergies that can be realized with global streaming platforms are too great. Nobody in Germany can or wants to invest as much money as the US players. In 2018 it was a total of over 60 billion dollars, around 54 billion euros, for which over 500 series were produced. That is a cruising altitude that can hardly be reached in Germany even with three or four ambitious productions such as “Babylon Berlin” a year. It is not known whether Netflix will still be spending as much money in 2020. But all other providers must first invest further in order to be able to compete seriously with Amazon and Netflix.
In 2020, the upheaval is in full swing: from linear to non-linear, from cable and satellite to streaming, from classic TV channels to global VoD platforms. And viewers will use more and more offers on the reception channels that are most convenient and most attractive for them. And according to the current development, that is: Video on Demand.
The Albanian army has conquered the world. And it shows: Innovations usually establish themselves more slowly than one initially thought; on the other hand, their effects are ultimately more weighty than one would have initially suspected.
Klaus Goldhammer is the managing director of Goldmedia GmbH.
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