15.2 Changing business models and industry structures

The television industry is undergoing a seismic shift as traditional business models clash with emerging ones. Streaming services, data-driven content strategies, and direct-to-consumer platforms are reshaping how we watch TV and how companies make money from it.

This transformation is forcing media conglomerates to adapt or die. They're restructuring, investing in original content, and embracing new technologies. Meanwhile, user-generated content is democratizing creation and influencing mainstream TV in unexpected ways.

Traditional vs Emerging Business Models

Revenue Sources and Distribution Methods

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• Traditional television business models rely heavily on advertising revenue and subscription fees from cable and satellite providers
• Emerging business models include subscription video-on-demand (SVOD), advertising-based video-on-demand (AVOD), and direct-to-consumer (DTC) streaming services
• Linear programming model of traditional television faces challenges from on-demand content consumption patterns in emerging models
• Traditional models involve complex rights negotiations and distribution agreements
• Emerging models prioritize content ownership and direct consumer relationships

Content Strategies and Viewer Engagement

• Emerging business models leverage data analytics and personalization to enhance viewer experiences and inform content creation decisions
• Shift from appointment viewing to binge-watching impacts content release strategies and audience engagement in emerging models
• Hybrid models combining elements of traditional and emerging approaches become increasingly common as the industry evolves
• Traditional models focus on scheduled programming (weekly episodes, seasonal releases)
• Emerging models offer flexibility in content consumption (entire seasons released at once, interactive content)

Technological Advancements and Adaptation

• Emerging models utilize advanced streaming technologies for seamless content delivery
• Traditional models adapt by incorporating TV Everywhere initiatives (online access to cable subscriptions)
• Emerging models implement sophisticated recommendation algorithms to personalize user experiences
• Traditional models integrate second-screen experiences to enhance viewer engagement (live tweeting, companion apps)
• Both models explore opportunities in virtual and augmented reality for immersive content experiences

Streaming Services' Impact

Market Disruption and Audience Fragmentation

• Streaming services lead to cord-cutting, resulting in decline of traditional pay-TV subscriptions and advertising revenue for broadcast and cable networks
• Rise of streaming fragments audiences, challenging mass-market approach of traditional television
• Targeted content strategies become necessary to address niche audiences
• Streaming platforms disrupt traditional content distribution windows, altering release patterns and syndication models for television shows and movies
• Competition intensifies for premium content, driving up production costs and changing dynamics of talent acquisition in the industry

Industry Response and Adaptation

• Traditional broadcasters and cable networks launch their own streaming platforms, often cannibalizing their linear TV offerings (HBO Max, Peacock)
• Streaming services accelerate trend towards vertical integration in media industry
• Content producers increasingly become distributors to maintain control over their intellectual property
• Traditional networks explore partnerships with streaming platforms for content distribution (CBS and Netflix for Star Trek: Discovery)
• Cable providers offer skinny bundles and internet-based TV packages to compete with streaming services (Sling TV, YouTube TV)

Content Landscape and Viewer Expectations

• Abundance of content on streaming platforms changes viewer expectations
• Programming decisions and content quality across entire television ecosystem influenced by streaming trends
• Niche content finds new life on streaming platforms (revivals of canceled shows, international content)
• Streaming services invest heavily in original content production to differentiate offerings (Netflix's Stranger Things, Amazon's The Marvelous Mrs. Maisel)
• Traditional networks adapt programming strategies to compete with binge-worthy content (limited series, event programming)

Media Conglomerates' Adaptation Strategies

Organizational Restructuring and Integration

• Vertical integration through mergers and acquisitions to control both content creation and distribution channels (Disney's acquisition of 21st Century Fox)
• Development of proprietary streaming platforms to compete directly with pure-play streaming services (Disney+, HBO Max)
• Restructuring of internal organizations to prioritize streaming and digital initiatives over traditional broadcast and cable operations
• Formation of strategic partnerships and alliances with technology companies to enhance distribution capabilities and improve user experiences (Comcast and Apple TV+)
• Consolidation of content libraries and intellectual property to create comprehensive offerings across multiple platforms

Content Strategy and Investment

• Investment in original content production to differentiate offerings and attract subscribers in increasingly competitive market
• Leveraging existing intellectual property and franchises across multiple platforms and formats (Marvel Cinematic Universe across films, TV shows, and theme parks)
• Adoption of data-driven decision-making processes for content creation, marketing, and audience targeting
• Exploration of interactive and immersive content experiences to engage audiences (Black Mirror: Bandersnatch)
• Development of diverse content portfolios to appeal to global audiences and niche markets

Technological Innovation and Data Utilization

• Implementation of advanced analytics platforms to gain insights into viewer behavior and preferences
• Investment in artificial intelligence and machine learning technologies for content recommendation and personalization
• Development of proprietary streaming technologies to enhance user experience and reduce reliance on third-party solutions
• Exploration of emerging technologies such as virtual reality and augmented reality for new content formats
• Utilization of big data to inform content acquisition, production decisions, and targeted advertising strategies

User-Generated Content's Influence

Democratization of Content Creation

• User-generated content (UGC) blurs lines between professional and amateur content creation, challenging traditional notions of television programming
• Platforms like YouTube and TikTok emerge as significant competitors for audience attention
• UGC influences content formats and distribution strategies in broader television industry (short-form content, vertical video)
• Low production costs and rapid content creation cycles of UGC put pressure on traditional television production models to become more agile and cost-effective
• Rise of mobile-first content creation tools enables wider participation in content production

Industry Integration and Talent Discovery

• UGC becomes source of talent discovery and content inspiration for traditional television networks and streaming platforms (Justin Bieber, Shawn Mendes)
• Rise of influencer marketing creates new opportunities for brand integration and advertising within user-generated content
• Traditional TV advertising models adapt to incorporate influencer partnerships and sponsored content
• Television networks develop shows based on popular UGC creators and formats (YouTube Red's Cobra Kai, TikTok-inspired reality shows)
• Streaming platforms invest in acquiring and promoting UGC creators to attract younger audiences

Challenges and Cultural Impact

• User-generated content fosters more interactive and participatory media culture, influencing audience expectations for engagement with television content
• Concerns about content quality, copyright infringement, and platform responsibility emerge as significant challenges in integration of UGC into broader television ecosystem
• UGC platforms grapple with content moderation and ethical concerns related to user privacy and data usage
• Traditional media companies develop strategies to authenticate and verify UGC for use in news and entertainment programming
• Impact of UGC on attention spans and content consumption habits influences broader television industry's approach to storytelling and audience engagement