Broadband TV Service and Advertising Revenues to Quadruple by 2020

Red Bee Media, a media management company, has revealed new research which suggests that the UK television industry expects revenue from the a new generation of online video services, fuelled by faster broadband ISP connectivity, to quadruple by 2020. But incumbent broadcasters aren’t going to be the main winners as competition from new services (e.g. Netflix , YouView etc.) will begin to eat away at the established market.

The study suggests that competition will grow as the “UK’s digital infrastructure matures and as broadband connectivity spreads,” which will help to make IPTV and web-based TV / Movie video streaming services more viable than they ever were before.

As a result the battle over content rights (e.g. premium movies and sport etc.), between old and new players, is predicted to be become increasingly heated. Some 72% of respondents felt that competition for premium content will intensify dramatically by 2020.

Industry respondents also expect that nearly a quarter (23%) of all UK adults will watch video through games consoles by 2020 (up from 12% in 2010). Today most of the major games consoles, such as Microsoft’s XBox 360 and Sony’s PlayStation 3, have access to video streaming services from multiple sources (e.g. BBC, LOVEFiLM etc.).

Bill Patrizio, CEO of Red Bee Media, said:

“From talking to the industry, it’s clear that technology and internet businesses are fast becoming significant players. The question we need to ask ourselves is whether the innovations brought by these new entrants are going to sustain or disrupt our industry in the years to come.

Will the internet be the industry’s friend or foe? And what role will regulatory bodies play in determining the impact and pace of change? If the last ten years have seen the convergence of broadcasting with broadband, it’s likely that the remainder of the coming decade will see a collision and competition between business models driven by consumer demand and expectation and changing patterns of media consumption.

Media companies will have to fight hard and innovate in a fast changing, technologically driven landscape if they are to make the most of this flourishing market.”

Elsewhere 57% of respondents predicted a major technology company, such as Google, Apple or Samsung, would acquire a package of live rights to Premiership Football and 46% expect YouTube to invest over £100 million on original UK video content by 2020. Hardly surprising when you consider that YouTube (Google) still dominates most UK video streaming charts.