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Monday, April 25, 2005

21st Century Television Networks in the Convergence World

Delloite has come up with an excellent report on the 21st century television networks. The report is set in the context that the conventional business model for television networks around the world was simple: produce programs, broadcast them across a national network of owned and affiliated stations to a mass audience, and sell access to that audience to advertisers based on viewership.Today, however, the situation is much more complex — and is likely to become more complex still. Conventional "television content" is now being burned into DVDs, time delayed by Personal Video Recorders (PVRs), broken into fragments, piped on demand over the Internet, downloaded into mobile devices and syndicated around the globe. Such changes are having a profound effect on the structure, dynamics and future of the global broadcast television industry, both private and public.
The most significant imact of this transformation is audience fragmentation. Content is being consumed across an expanding array of media, channels and devices. This, in turn, is steadily eroding the once dominant position of television broadcasters andmajor networks. The massive audience once enjoyed is scattered along with content and the ability to charge premiums to advertisers are diminishing. The threat of audience fragmentation is on account of content explosion and media growth .Agile broadcasters, content providers, and television companies that can redefine scope, shape and scale of their network to capitalize on the changes would survive and the rest would fall apart.The report examines the evolution of the incumbent television network model; assesses where the industry currently is; examines the impact of consumer behavior on the sector's transformation; and, offers a few ideas to help television companies grow a critical mass of viewers, advertisers and revenues in a market of fragmenting audiences. An excellent read with good charts.

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