Accenture: broadcast revenues fall, but hope remains | Broadcast | News | Rapid TV News
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Growth in the broadcasting industry revenues increased to $430 billion in 2015 — but fell short of the $448 billion analysts had forecast.

According to Accenture, for the majority of pay-TV broadcasters tracked in recent analysis, the slowing growth in advertising revenues in particular has become significant. The traditional linear TV window is losing its appeal because advertisers and consumers prefer more targeted campaigns focused on specific segments. Between 2011 and 2014, most broadcasters in this report saw their advertising revenues fall as a share of overall revenues.

“The broadcasting ecosystem continues to expand rapidly beyond traditional broadcasters, as digital natives increasingly use content to drive growth,” the firm said. “Examples include Amazon’s Prime bundle, Rakuten’s acquisition of Wuka.tv., and Alibaba’s launch of Tmall Box Office.”

Broadcasters have sought to create additional value, faced with this shifting competitive landscape, including through increased merger and acquisition and consolidation.

“But it is unlikely these initiatives alone will not be sufficient to close the gap between expectations and performance,” Accenture said in the report, which has led some to embrace their own over-the-top (OTT) services, despite their threat to traditional revenues.

Accenture pointed out that in the UK, Sky launched the OTT service called Now TV; while in the US, DISH TV has Sling TV and Comcast recently rolled out Stream. The latter is true OTT, while the Comcast service enables Xfinity Internet customers to pay $15 a month on top of their Internet bill to watch shows on tablets, laptops and smartphones from a dozen networks.

Broadcasters, Accenture stressed, have an advantage over other industry players: trust. Most broadcasters have been at the heart of natural cultural life for decades. Throughout their lives audiences have growth up watching broadcasters’ programmes.

Accenture’s Digital Consumer Survey found that a higher number of respondents (31%) trust broadcasters to provide high quality service than Internet video providers (15%) and social media service providers (5%) combined.

Also, several broadcasters have successfully made up for the shortfall in advertising revenues by generating more from content they have acquired from international rights deals and local or global syndication.

“Reinvigorating investment in content has led to creation of new content kingdoms beyond Hollywood,” Accenture noted. “Increasingly, Brazil and India are becoming content hubs, with a wealth of content being created for consumption locally and around the world. Grupo Globo and Televisa are good examples of broadcasters focused on original content production that have emerged as export giants.”

These broadcasters are emerging as real challengers to the Netflix expansion strategy. Accenture analysis found that those broadcasters who earn 20% or more of their revenues from content production and licensing have outperformed their peers who rely on advertising income alone, achieving higher levels of capital efficiency and larger operating margins.