All is not so dire, says Deloitte’s annual predictions
TORONTO – Deloitte is predicting the prevailing sentiment of doom for traditional TV will actually be muted in the immediate future, as high over-the-air television viewership (it’s free!) is expected to hold steady in the wake of cord-cutting.
This year at least 1.6 billion people globally, representing 450 million households, will “get at least some of their TV from an antenna,” said Deloitte’s annual Technology, Media, and Telecommunications Predictions report, officially released Tuesday at an event in Toronto. That data is taken from 83 countries with a combined population of 6.6 billion people, Deloitte said.
Those numbers – which Deloitte said could be as high as 2 billion, which is 50% more than all people paying for TV over cable, telecom-provided IPTV, and direct broadcast satellite in 2020 – combined with $32 billion in revenues this year from ad-supported video on demand (AVOD) services, will mean the “global TV industry [will] keep on growing even in the face of falling TV viewing minutes” and pay-TV cord-cutting.
The United States and Canada combine for 44 million people using antenna. “Rumors of antenna TV’s death have been greatly exaggerated,” it reads.
The mechanism that is supporting viewers’ ability to get free TV via antenna is advertising. It’s a phenomenon that has been highlighted by past Deloitte reports and by Corus Entertainment’s head, Doug Murphy: More advertising dollars on digital platforms are heading back to traditional TV – or, at least, advertisers are taking a more balanced approach to their spending portfolios.
Case in point, Deloitte predicts global TV ad revenues will grow by more than US$4 billion this year, to US$185 billion next year. “Although digital has been growing, and is expected to continue growing, individual ad buyers are constantly reallocating their spending between digital and TV… The ongoing shift to digital ads of all types isn’t a one-way street,” said the Deloitte report.
Murphy has also said, on a number of occasions, advertisers are fleeing the digital world to more safe TV spaces. For instance, in the wake of revelations that big brand advertising was being placed on offensive and controversial videos, those ads began coming back to linear TV. Still Deloitte notes that while TV ads are doing better than newspapers, it is still overall worse than digital when it comes to growth.
The consulting firm also noted targeted or “addressable” ads have signalled a change in advertising money coming back to TV. Corus has been working on a product called Cynch that helps advertisers target many specific groups of viewers. “If a home has the right kind of box or TV,” the report said, “advertisers can deliver specific ads to specific households…at premium rates (three times that of a traditional ad, in one U.S. instance).”
Murphy said he’s been hoping other broadcasters – he Rogers has committed – would adopt specific viewership categories, such as “foodies,” so that the industry benefits as a whole from an infusion of ad dollars. Deloitte predicts Canada will see an increase in TV ad spending in 2020, in line with the upward trajectory that Corus has seen in its own TV segment last year.
“Why aren’t things worse for broadcasters’ TV ad revenues, at least in markets such as the United States where viewership is falling? There, antenna TV may well be one of the factors making the difference,” Deloitte said.
“Rumors of antenna TV’s death have been greatly exaggerated.” – Deloitte
The report continued: “Antenna TV viewership is growing or at least stable in several large ad markets, representing tens of millions of antenna TV watchers who (mostly) are not skipping ads while watching traditional TV.”
That trend is somewhat surprising because the discussion on television here constantly focuses on which new over-the-internet streaming platform will come to Canada next – and how many more cord-cutters it will take with it.
The broadcasting distribution undertakings in Canada, such as Bell and Rogers, have been spending on consolidating their subscribers into their TV ecosystem by unveiling new IPTV products. That has come in the wake of a flood of streaming platforms, such as DAZN, CBS All Access and recently, Disney+.
All that said, Deloitte points to the U.S. market to highlight cord cutting is a serious challenge for pay-TV companies and predicts five million pay TV subscribers will stop subscribing – and Americans, on average, won’t spend more on pay TV this year than last. TV viewing minutes this year will also decline south of the border by 5% overall, based on year-over-year data across all demographics in 2019.
Near term, however, TV’s saving grace will be this summer’s Olympics and the 2020 U.S. presidential election, but the trend “will almost certainly be a decline.”
The report also highlighted the emerging low-earth orbit satellite space, a focal point among the governing Liberals, who’ve made it a key point in their 2018 budget and have pledged $85 million to Ottawa-based satellite company Telesat for that technology. The government hopes the technology would help aid in their pursuit to connect the entire country to the basic service standard of 50 Mbps download and 10 Mbps upload speeds — including hard-to-reach areas.
“Other telecoms might decide to cede rural and less-developed areas that they do not currently cover to satellite broadband players, since building infrastructure in these areas is often cost-prohibitive. In fact, satellite broadband constellations may actually help telecommunications companies by improving mobile backhaul services,” the report said.
