Omdia's new, long-term, forecasts for the traditional TV business paint a positive picture for the sector up until 2030 (and beyond). There are few signs of a reduction in traditional TV take-up. What is changing, of course, is that the impressive growth of OTT video is creating a significant overlap between video streaming and traditional TV. This means that there will increasingly be an intra-household battle for viewing time between traditional TV and OTT video.
But, significantly, very few OTT video subscriptions are expected to be taken in isolation (i.e., without a traditional TV service in the same household). Omdia's assumption is that OTT video will continue to have very limited standalone appeal and will, for the foreseeable future, rely on traditional TV to fill in the gaps in its offering.
Looking beyond the influence of OTT video, question marks have been raised for several years about the long-term viability of terrestrial TV. Its existence until 2030 has been guaranteed by the International Telecommunication Union (ITU) standards body, but, inherent in the setting of that date was the possibility of IP-based traditional-TV alternatives growing to such an extent that, by 2030, terrestrial TV would dwindle to such a low level that it could be completely phased out. However, Omdia's new forecasts to 2030 rule out that possibility. Digital terrestrial TV will still be the primary TV service in half a billion households by 2030. This is 22.5% of the world's TV households and so is far in excess of an unimportant remnant that can be easily disregarded.
Omdia's assumption is that rather than hindering the growth of traditional TV, OTT video is reinforcing its raison d'être – particularly for free-TV formats. Those households that cancel their pay-TV subscription in favor of an OTT service will no longer have a pay-TV platform with which to access their local major TV networks. In this scenario, an appealing alternative is to top up an OTT subscription with a digital terrestrial or free DTH service, so driving the pro-traditional TV trend. Hybrid boxes, combining OTT video capability with an in-built terrestrial tuner, also contribute to this trend.
While most TV networks now stream their channels online, question marks remain over whether the broadband infrastructure can replicate the high-quality viewing experience of traditional TV formats. That is certainly the situation today, and Omdia expects it to remain the case in 2030 – particularly if broadband networks would be expected to somehow accommodate an additional 500 million new streaming households should they have their terrestrial TV access removed. The viability of terrestrial TV, and traditional TV as a whole, will therefore extend to 2030 and well beyond it.
Note: Omdia's forecasts typically project ahead for a five-year period – as looking beyond that timeframe can start to become less certain. But, periodically, we think it is useful to take a longer-term view of the market segments we examine. Omdia's Digital Consumer 2030 research will be formally released towards the end of 2019, but some of the initial data for that project has been used here.