The Death of Linear TV? More Like a Rebirth

Linear TV has a new prophet of doom in Netflix CEO Reed Hastings, who claimed “It’s definitely the end of linear TV over the next five to 10 years.”

What is linear TV and why might its days be numbered?

Linear TV is a live service with traditional forms of distribution [over-the-air], where consumption of scheduled content is viewed at the time of broadcast.

In the UK it’s estimated that, although declining, linear TV viewing still accounts for 70% of total TV set use [endersanalysis.com] and total weekly reach for individuals is 81% [thinkbox.tv].

As indicated by Hastings’ broad timeline the continued retreat of linear TV will be evolutionary. A transformation made more complex by technological convergence [streamed live TV is a linear broadcast], differences across content genres [sport and news will continue to drive live TV viewing] and mixed adoption rates between generations [Thinkbox claimed that in 2021 BVOD accounted for 26% of 16-34’s broadcaster viewing].

Linear TV may never have a precise time of death.

Commercial linear TV has a distinct economics. Much of its airtime is traded relative to share of audience. Market mechanics offer some protection, but as linear TV viewing declines revenue is compromised.

In response broadcasters continue to develop new platforms and products to meet the demands of changing viewer habits, adapting and enhancing existing forms of measurement to protect monetisation. Viewing, measurement and revenue are intertwined and are of existential significance. At what pace and in what ways the market transforms remain to be seen.

Migrating ad loads from linear to OTT is a challenge. Although the latter is not covered by COSTA [Code on the Scheduling of Television Advertising], the idea of saturating non-PSB channels and services with commercial minutes is fanciful.

There’s a fine line between maximising commercial airtime and retaining viewership. Presumably a tipping point exists where user experience is diminished due to onerous or poorly scheduled ad loads. Just because you can doesn’t mean you should.

As viewing and content distribution continue to fracture, priority should be given to blending ad experience with platform and device type. A homogenous approach to ad load will not work, instead it should be tailored to subscription pack and user journey.

Whilst this change to monetisation presents risks, there are also opportunities to diversify revenue streams, empower products using data, and create new value through user engagement. This most likely explains the rise in mixed economies, where subscribers can choose between ad-funded, a reduced ad experience, or ad-free.

Much of the technological limelight is given to new platforms facilitating the distribution and consumption of on demand content. But there also exists the less glamorous role of technology in delivering operational frameworks to monetise this new media.?

As we observe the evolution of linear TV broadcasters, it might also be argued their history and experience is influencing decisions of new streaming platforms. This is evidenced in Netflix announcing plans for an ad supported offer and Amazon’s move into live sports [and subsequently the use of dynamic ad insertion for these linear broadcasts].

Might we end up with a situation where old and new migrate towards a centre ground, characterised by similar technologies, measurement currencies, and hybrid commercial models? In this sense they could share more in common than which differentiates them.

Whilst it seems inevitable that linear TV viewing will continue to decrease, and traditional broadcasters will experience increased competition; their fate is inextricably linked to adaptation.

The decline of linear TV is expressed in the transformation of its economics, technology, content distribution, viewer behaviour and measurement.?We should not confuse its end with the demise of traditional broadcasters. What we are witnessing is more a rebirth than a death.?