By Dr Amal Punchihewa
Over the last few months, this column has focused on reminding media and broadcast (M&B) industry stakeholders about emerging trends, ways to formulate influential strategies and also provide some food for thought in shaping the future of media, radio and television.
Some of the case studies highlighted aim to inspire all stakeholders to tackle some of the biggest challenges facing the M&B industry, and to share the latest thinking and best practices on how to build resilience in M&B operations and build a strong ecosystem.
This article will build on these by sharing and discussing some key insights from several recent conferences, summits, and events, which are likely to impact the M&B industry.
Let us take a view from the top to explore the bigger picture of global trends and how they connect to a shifting M&B landscape in APAC. Asian broadcasters face many challenges; among them, trust, cost, universal appeal, reaching young people, and politics, to name but a few. Many broadcast stakeholders are already reacting and adapting business models to address new and complex challenges within the industry, including how to fund public service media, prioritise new revenue channels, which innovative tech to invest in, as well as new ways to gain and retain customers to help services endure and thrive in uncertain times.
During the NAB (National Association of Broadcasters) show in Las Vegas, IABM (International Trade Association for the Broadcast & Media Industry), presented a State of the Industry report, which revealed that immersive media has dropped out of the list of top seven priorities.
Although Artificial Intelligence (AI) and Machine Learning (ML) are mature for closed captioning, script and data generation, many users are claiming mid-90 % accuracy. AI has now grown from sixth to first place in the priority list, possibly driven by the hype around generative AI and increasing focus on efficiency.
Another key finding from the IABM roadmap development process was terminology and language used within the industry are neither succinct nor clearly understood. For example, the word ‘cloud’ has raised many different thoughts, prejudices and different meanings among stakeholders.
According to Omdia, a market research company, by the end of 2023, 330 million video-on-demand subscriptions (SVoD), or 20% of the global SVoD market by subscriptions, will be via operator bundles. In 2028, this number is expected to grow to nearly 530 million subscriptions, representinging 25% of the streaming video global market. This can be considered a win-win situation for both content owners and operators.
Research from consultancy and advisory firm Media Partners Asia showed only 300,000 net new subscriptions in 2023 between January and March in the five principal markets of South-east Asia – Indonesia, Thailand, Malaysia, Singapore and the Philippines. The study focused on premium video-on-demand (VoD) streaming and SVoD while excluding YouTube, TikTok and other social video platforms. Total South-east Asia SVoD subscriptions reached 49 million in Q1 2023, compared with 48.7 million at the end of 2022.
As Omdia reports, free ad-supported streaming TV (FAST) channel revenue reached US$4 billion in 2022 and is expected to reach $6.3 billion in 2023 — and $12 billion in 2027. Further, the US will account for about 80% of the total in 2023 and top $10 billion in 2027. It is useful to know the implications this would have on the APAC region.
While the US currently dominates the market, research found that the UK, Canada, and Australia are major growth contenders with rapid expansion expected over the next four years. Although three of the five largest FAST markets are English-speaking nations, Canada, Germany, and Brazil, in third, fourth and fifth place, respectively.
APAC is highly diverse in many dimensions, including languages. It will be challenging for FAST to offer mainstream opportunities for non-English content in APAC. The US will continue to dominate the market, and only a $1.6 billion revenue opportunity will emerge for FAST channels outside of the US by 2027.
The Omdia survey also reveals that gigabit broadband is the standard and 60% of service providers globally offer gigabit broadband. It is not just about the offering but also the increasing adoption of faster broadband.
During NAB, IABM reported that global situations such as inflation have negatively influenced business models in entertainment, especially for streaming. IABM maintains streaming has been going through a sort of existential crisis, observing that streaming providers in the M&B industry are moving the focus away from growth to profitability.
APAC broadcasters could offer streaming TV services as a FAST TV channel. Initially, the challenge would be generating revenue above the cost of online delivery as online advertisement space is shared by many players, including large streaming organisations.
As reported by the Asia Video Industry Association (AVIA), Netflix has committed to a $2.5 billion production spend on South Korean content after discussions led by South Korean president Yoon Suk Yeol. Ted Sarandos, Co-CEO of Netflix, commended Yoon for his love and strong support for the South Korean entertainment industry and for fuelling the South Korean wave.
Professional broadcasting and media organisations in APAC need to promote and advocate big streaming players to make similar investments in many other countries. Such organisational power should be used to achieve regional goals in addition to individual goals to assure equity and fairness.
Hybrid consumption is a combination of linear, over-the-top (OTT) and FAST services. Hybrid consumption is shaping priorities for broadcasters and platform operators around the world. Network service providers (NSPs) such as Arqiva in the UK are investing in new platforms and services to tackle these emerging priorities.
Arqiva is at the core of the broadcast industry in the UK, transporting television and radio content effectively, securely and sustainably at scale. Arqiva distributes many channels locally and internationally using their cloud, fibre and satellite infrastructure. Similar but smaller-scale NSPs such as MYTV in Malaysia, Kordia in New Zealand and BAI in Australia provide major distribution services to broadcast cost-effectively and sustainably.
Reducing operating costs is a primary challenge for network operators, and rising energy and personnel costs make it one step harder. Future distribution and transmission solutions are being designed with sustainability and the environment in mind, and they keep operating costs to a minimum.
From a disaster communication point of view, innovations need to meet the challenges of network operators by combining high energy efficiency and high availability, with low service, low maintenance and low space requirements.
The resurgence and growth of targeted advertising may change the market dynamics of the streaming landscape from an advertising perspective. There are some misconceptions about advertising in the TV space, which are being addressed by media associations, broadcasters and regulators.
The M&B industry has been discussing the shift of media and broadcast production to cloud-based processing to offer digital TV and radio. This is yet another challenge for the M&B industry, although improvements in overall operational efficiency, reduced costs, lower energy consumption, and enhanced flexibility for both production and distribution are anticipated.
All M&B stakeholders should understand the relevant concepts and terminology correctly to build a sustainable and resilient ecosystem. I end the article with a question for you: Can APAC broadcasters sustain FAST services from a technical, financial and universal perspective?
In next month’s column, I will share and critically discuss the outcomes from the 9th Asia Pacific Spectrum Management Conference that was held in Bangkok , Thailand, in April and the Asia Media Summit, AMS 2023, that will be held in Bali, Indonesia, from May 21 – 25.
Dr Amal Punchihewa is an ITU expert and advisor/consultant to the Asia-Pacific Institute for Broadcasting Development (AIBD), and was formerly Director of Technology & Innovation at the Asia-Pacific Broadcasting Union (ABU).