The arrival of the likes of Netflix has left an indelible mark on a TV business which is now is a state of flux according to analysis by IHS.
Indeed this surge in direct to consumer (D2C) offerings are emerging as key new services for traditional channels as the core concept of the TV channel is fragmenting in the face of changing audience behaviour.
Broadcasters are adapting to meet evolving viewer needs as they go to tap into surging subscription online video revenue. The analyst cited HBO Now, Discovery DPlay and DisneyLife as leading the way and employing a strategy that not only gives them more power in carriage-fee negotiations, but also allows them to grab their piece of growing online-subscription revenues.
Yet the research firm pinpointed the subscription video-on-demand (SVOD) leader as a major factor spurring channels' D2C launches. IHS projects that by 2018 Netflix will pass 100 million subscribers worldwide, while between 2015 and 2019 growth will be 22% with ten million new Netflix subscribers to be added in the US alone. The UK will be the number one market in Europe for Netflix, with 7.1 million paying subscribers by 2018.
The traditional linear channel will be around for a long time to come, but it will become increasingly marginalised by a plethora of online services, from catch-up TV to TV everywhere, pay-TV channels' streaming offerings and YouTube multi-channel networks," said Ted Hall, research director at IHS Technology.
"Excluding spend on sports, in 2013 and 2014, Netflix outspent almost everyone on original and acquired content. In 2014, Netflix's content spend was about double that of ITV and Amazon. International subscribers are key ... As Netflix invests more in international content, we expect to see huge growth in Western Europe over the next three years, with ten million new subscribers to be added to its already burgeoning international base."