Study: TV, Video Spending to Stay Flat1 Jul, 2014 By: Chris Tribbey
Total TV and video revenue over the next five years, adjusting for inflation, will remain flat, despite new VOD and TV Everywhere services, according to a new report.
Overall TV and video spending has seen minor growth since 2004, rising from $195 billion (2013 dollars) to $213 billion in 2013, according to the report from The Diffusion Group (TDG). That’s an increase of only 9% during a decade period, equivalent to a compound annual growth rate (CAGR) of only 1%, according to the report.
“While new viewing platforms, including TV Everywhere and pay-TV VOD, are showing promising in-market results, they are still relatively nascent and taking shape in a business landscape known for changing very slowly. It’s like turning a supertanker while you are rebuilding it,” said Bill Niemeyer, senior TDG advisor and author of the report. “It takes a long time to take new platforms from first in-market trials to fully-realized revenue-generating ecosystems. There will be revenue winners and losers during the next five years, but the total TV/video dollar pool will stay the same.”
Since 2010, growth rates of business and consumer spending for TV and video have been negligible, with total spending rising only 3% from 2010 to 2013.
“Even as they implement TV Everywhere and VOD, operators and content providers have to make key decisions now about going forward on new advanced techniques and technologies,” Niemeyer said. “These will be critical for long term growth, but will not begin to generate significant revenues until after 2020.”