Today's consumers are increasingly abandoning pay TV-subscriptions and instead choosing subscription on-demand video streaming platforms such as Netflix, Hulu, Amazon Video and HBO. This development is of course coming at the expense of the traditional TV industry and it's also creating challenges for brands that now need to rethink how they can reach their target audiences.
An increasing number of consumers want to watch their favourite show when they want and how they want it, on-demand in other words. Last year in the UK and in the U.S., over 50% of entertainment programs was viewed on-demand according to the report The Digital Revolution Is Disrupting the TV Industry by Boston Consulting Group (BCG). The report also predicts that online video will account for almost 80% of fixed-data traffic and nearly 70% of mobile traffic by 2018. Furthermore the report shows that revenues from online advertising have increased sevenfold between 2010 and 2015.
Research from Think With Google suggests that the old way of reaching your target audience has gotten harder and more expensive and as a result brands need to shift their focus from traditional TV to online video platforms where more and more consumers hang out.
Visualisation from Google's report The Latest Video Trends: Where Your Audience Is Watching.
The statistics above and the research from BCG suggests that we are in a major shift when it comes to the way we consume video content. We no longer focus on one screen or one platform at a time, instead we have gotten used to checking our smartphone while binge-watching our favourite series on Netflix. This kind of behaviour is especially common among Generation Y (also called Millennials) who have grown up with digital technologies, and according to an article in TechCrunch, Generation Y have 60 percent shorter attention spans compared to previous generations when it comes to media.
Jacob Rosenzweig, BCG partner and co-author of the report says that: "To thrive in the digital revolution, TV players must think strategically about how to maximize the assets and content they have, invest where they have gaps, and anticipate where their traditional business models will be most at risk." The future of TV and the video-industry is not clear, but what we do know is that the digitisation will keep on disrupting value-chain, change TV-advertising and create new viewing habits.
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