The new digital challenges of television channels in 2018

2018/04/09

Adapt to profound changes in the way programs are consumed, manage unequal power relations with telecom operators, or retain and grow audience: television channels have significant challenges to take up this year.

The consumption of TV programs in profound change

View anywhere, at any time and on all devices: the consumption of television programs is strongly oriented towards non-linear, gradually moving advertising issues from television to Internet.

In response, several free channels, therefore particularly dependent on their advertising revenues, want to pay Internet service providers to broadcast on the boxes of telecom operators. Thus, TF1 reached an agreement with SFR (french telecom operator) last November, to almost double its remuneration.

This strong trend towards OTT (Over the top) and the abundance of free channels is forcing TV channels to adapt. In the United States, the number of subscribers to Netflix has already exceeded the number of cable’s subscribers.

"49% of respondents think there are too many TV programs and it is difficult to navigate"

Faced with this overabundance of content, the channels must imperatively engage their audience, providing them with quality and targeted content. A study of Hub entertainment research shows that 49% of respondents think that there are too many television programs and that it is difficult to choose: on average, consumers need 18 channels to get their bearings in content.

In other words, users only want to pay for what they watch, and channel price offers are slowly moving in that direction. Molotov.tv, an internet TV service launched in July 2016, has just surpassed the two million active users in less than two years, of which more than 25% use it daily. An additional proof of a strong change towards the OTT and the content à la carte.

Producing original content ...

Many channels such as Arte or M6play are adapting to these new modes of consumption by offering online catch-up offers. At the end of 2017, Arte announced that they would accentuate their non-linear strategy by offering catch-up programs on the web and from 5am.

A way for television channels to adapt to the rapid transformation of the consumption mode of the programs but insufficient to increase the audience that they will be able to fetch with the creation of original and differentiating contents.

Telecom operators, the main channels distributors, are also investing in content creation to avoid any loss of subscribers towards new OTT offers.

... while controlling user data

This original production is essential for telecom chains and operators to maintain their subscriber base but can be expensive. Hence the importance of understanding its audience and viewing habits to know how to reach and engage it with targeted content.

According to the Canadian consulting firm FG8, the content available on Netflix has halved in five years, the US company prefers to invest heavily in original productions, allowing it to emerge from many licensing contracts. 80 films will be produced in 2018.

Targeted advertising as a growth driver

The Xerfi study "Publishing and distribution of television channels" (November 2017) underlines that the leading media and television channels will be the ones that will seduce advertisers. The management and control of user data thus becomes central to addressing the right message, to the right audience, on the right platform and at the right time.

"Advertising is the third pillar of our business"

- Michel Combes, CEO of Altice Group

TF1 and M6 groups have already conducted experiments at this level and Altice has made it the third pillar of its activity.

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