AMSTERDAM--Over-the-top services are growing fast, but players like Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN) aren't going to displace broadcasters. That was the general consensus of a five-member panel of broadcasters and service providers here during an IBC panel on multiplatform delivery.
"Multiplatform delivery: Do we need the broadcaster?" discussed the onslaught of OTT alternatives for viewers and whether traditional broadcasting could survive it. Panelists represented various media companies including thePlatform, Germany's Maxdome and rtv Media, Sweden-based Magine and Netherlands-based RTL.
A number of reasons were put forth as to why broadcasters would, in the end, be just fine. Arno Otto, managing director of digital media at RTL, pointed out that broadcasters have a massive advantage in that they already have lots of aggregated content. They also have much better funding than most OTT providers.
"RTL is a huge content aggregator on a local level," Otto said.
Magine's Jon Gisby, EVP of business development agreed, particularly when it comes to video on demand. "I don't see anyone who can do (VOD) better than broadcasters," he said.
While U.S. broadcasters have been largely silent about the OTT space--except for a few pointed barbs from CBS Corp., particularly around Aereo--European broadcasters sounded a confident note that they can compete against Netflix.
"In Germany the market is quite different," said Leslie McKenzie, EVP of E-Entertainment at ProSieben, parent company of Maxdome, its subscription-based online video unit. "The U.S. and the UK are heavy pay-TV markets, while Germany is a heavy free-to-air market." She added that pay services such as Sky make up less than 10 percent of Germany's TV market.
Netflix is entering a market in which most viewers already have access to big U.S. titles at little or no cost, she said "So the SVOD market dominating (in Germany) ... will be quite interesting," she said.
U.S. OTT providers trying to make a mark in the European space must also contend with both established operators and newcomers, both of which are ready for the competition, said Marty Roberts, co-CEO of thePlatform, which recently partnered with Verizon's (NYSE: VZ) digital media services unit to create an end-to-end video delivery offering in several regions. For example, "We are launching over-the-top services this year in every market where Netflix is going to launch," Roberts said.
But Tobias Oswald, head of digital at rtv Media Group sounded a cautious note. "From our position, with the consumer, there is a generational difference," he said. "TV consumption (right now) is stable, because older people watch more TV. But younger groups, particularly young men, are leaving TV behind." Their main use of the big screen is for single events or live sports, he said.
Further, the advent of the Internet of Things could change the game and make things riskier for broadcasters. "The most successful VOD provider (might be) who brings the most content to wearables in the next few years," Oswald said, adding that broadcasters may not have the level of competence yet to dominate innovative technology segments.
Regardless of their established position, broadcasters should remain on their toes.
"Netflix, they're awesome because they're causing everyone to actually react," Roberts said, pointing out that the competition has led to better program guides, better content, and more convenience for viewers.
McKenzie agreed, noting that broadcasters need to be aware of what consumers want and how they consume content. Further, they need to "look at the country's dynamic," she added, pointing back to German viewer expectations and behaviors.
Show coverage: IBC Live 2014
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