The advent of various VOD services has profoundly changed consumer habits and expectations. The availability of content has changed so much that the traditional, linear TV stations are slowly becoming irrelevant and losing their appeal to the average, tech-savvy consumer.

Apart from the vicarious experience of watching and experiencing an episode in unison, there is hardly any reason for people to adapt their daily schedules around the linear TV programming – and wait for shows that only air at specific hours, on a single day during the week. We no longer have the patience to wait for a new episode of the favorite show when VOD services allow to binge the entire season in one sitting.

But not all is lost. Linear TV, when combined with technology, can easily stand its ground and remain relevant to the viewers.

What is linear broadcasting?

Linear TV broadcasting is the traditional way television has been provided to households for decades. It bases on scheduled programs delivered to the audience over the air, or through satellite or cable providers. In simple terms, all national broadcast television services today count as linear TV.

The linear broadcasters’ struggle for relevance

Disrupted by streaming media and facing the multiple challenges of people’s changing TV consumption habits, the traditional free-to-air television is scrambling for the attention of viewers and advertisers. And the fears are not unfounded: a study carried out in 2018 showed that young people spent more time watching Netflix than all BBC TV services combined.

The key culprit for the fall of linear TV is Netflix, whose aggressive strategy to attract audiences (150m globally and growing) involves spending massive amounts of money. The streaming service has invested an eye-watering $1bn on its original content to secure a steady cashflow and independence of other publishers in the coming years. But on top of its own productions, Netflix has reported spending of $15bn on all its content in 2019 alone.

Netflix’s business model is, apparently, a real cash cow, as we’re seeing new platform launches from other giants like Apple, Disney and WarnerMedia. Disney alone is planning to invest heavily in its content over the coming years – estimated to $2.5 billion by 2024.

The challenges the linear broadcasting industry is currently facing

According to the Nielsen Total Audience Report 2018, linear TV is still in demand – even for young age segments. However, in its struggle to remain a viable competitor to streaming media, linear broadcasters have to face three key challenges:

Staying relevant

To remain relevant, linear broadcasters need to expand and be present – on top of the traditional linear programming – on all other platforms. Thus, should involve building a proprietary streaming platform, but still properly leverage the advantage of linear TV:

  • Access to highly relevant local content (e.g. 24/7 live news) for public broadcasters
  • Strong, known and tested show formats attracting big audiences
  • Loyal senior audiences, e.g. baby boomers, who haven’t made the switch to digital

Knowing what consumers want

With limited measurement, linear broadcasting TV has fewer ways to know what content people actually love, and what will be the best targeting of ads. But in the age of connected TV’s, it’s changing. Programmatic/linear convergence is already happening and one day will allow TV publishers, advertisers and agencies to capture measurement across all screens in the household and gain valuable viewability insights.

But there is a flipside. Although streaming video on demand media give their audiences the power of choice, it is – quite paradoxically – not always the best thing for the viewer. The thing is that the more choice people are given, the more likely it is that they are unhappy with their decisions. This being said, the strength of linear TV is that it can act like the guide introducing new content formats to people. Linear TV can surprise people and help them discover things rather than cherry-pick their content every single time and, quite possibly, walk in circles never discovering things outside their tastes.

Competing for consumer attention

The trends show that, although linear TV is struggling to compete with streaming video on demand media (aka SVoD), there are still specific audiences who prefer to watch traditional television.

time spend on linear tv

Source

The data clearly shows that the average time spent watching linear TV is still significant, although varies with regard to age – baby boomers spend an average 2:44 hours in front of the TV.


We’ve tracked the media consumption habits of Gen Z in another article on our blog.


The future of SVoD services

The future is looking rather bright for streaming media platforms, and viewers can definitely count on OTT services to continue their growth. We see it by the rapid expansion of platforms like Netflix and Amazon Prime Video. With fast broadband internet and streaming options services more available and cheaper, viewers can expect a fast and convenient viewing experience is expected to become more diverse, affordable and accessible whenever they please.

But there is also space for linear TV, it only has to properly adapt and leverage its unique strengths.

The future of linear broadcasters

Streaming video on demand services offer more choices and puts the viewer in control. With linear TV, you often have to pay for additional services like video on demand, whereas with streaming services, it is an all-in-one price.

To remain relevant, linear broadcasters will have to look into the possibilities of programmatic and VOD elements – not only for content recommendations, but also for better advertising opportunities. Some broadcasters are already exploring this new territory. CBS, on top of its national feed offers CBS All Access, through which it delivers local affiliate content. The platform is available on connected TV’s, mobile and OTT devices, offering a combination of live feed from the local affiliate and on-demand content. CBS is expecting to have 4m paying subscribers by the end of this year.

Even smaller players are looking into the possibilities of SVoD – STIRR is an upcoming ad-supported OTT service announced by Sinclair CEO Chris Ripley which will bring the best of both worlds: digital entertainment content with national news content, national syndicated talk content, and local news and sports from the company’s affiliates.

The advantage of linear TV

While consumers love the choice, they can quickly get overwhelmed with abundance. In the long run, the choice is also a burden for the publisher – instead of focusing on a handful of productions, streaming platforms have to channel their powers into dozens of niche series or shows. Some of these shows appeal only to small segments of their audience.

For publishers, SVoD programming is hard and expensive in the long run. It may require them to be more fragmented and focus on multiple niches –  the exact opposite of the model that has been the foundation of the television business for the last century. This is one of the reasons why, even today, streaming bundles don’t generate the profit margins cable and satellite bundles do.

This is clearly visible when considering Netflix – there are dozens of shows to tickle every viewer’s palate, but it’s getting harder to exchange impressions about a show with other people. Viewers have developed very discerning tastes and niche preferences. The more content there is, the harder it is to be on the same page with everyone else.

Synergy is the way forward

The living room, specifically the TV that sits in the room, is the touch point that’s still very relevant for advertisers – it offers the attention of the whole household, and does not run ad blockers.

Because many of the devices people use for watching linear TV are Connected TVs, there are distinct opportunities there for smart, digital targeting:

  • Advertising using the benefits of connected TV environments, e.g. Smart TV apps
  • Connected TV as a medium for Addressable TV, e.g. allowing highly targeted advertising displayed in slots within the standard linear broadcast content

Clearly, addressable TV is on its way to bridge digital programmatic and linear TV. The synergy is very tantalizing for the advertisers. The use of connected TV technology allows for significant cost-efficiency through more precise targeting and rationalization of ad spend.

It’s more important than ever for advertisers to really understand who they are talking to – what they care about, what they respond to – otherwise getting down to a personal level in the home, just comes across as being creepy, plain and simple.