• Internal Code :
  • Subject Code : BSS058-6
  • University : University of Bedfordshire
  • Subject Name : Strategic Management

Contents

Introduction

The scenario development process

Identification of driving forces

Identification of critical uncertainties

Developing a range of plausible scenarios

Discussing the implications

Future scenarios of TV and Video industry

Driving forces

Critical uncertainties

4 plausible future scenarios

Scenario 1 - Content supermarkets

Scenario 2 - Dominance of large global content owners

Scenario 3 - Revenge of broadcasters

Scenario 4 - No dominant players

Impact and implications

Scenario 1 - Content supermarkets

Scenario 2 - Dominance of large global content owners

Scenario 3 - Revenge of broadcasters

Scenario 4 - No dominant players

Conclusion

References

Introduction

Having a strategic plan in place is important for the future viability of the business, however, if businesses do not have certainty about the future, they cannot build a strategic vision for the future. This is where future scenario planning comes in. As Spaniol and Rowland (2019) mentioned, scenario planning is about making assumptions regarding the possible trajectory of the future and ascertaining the way it will affect the business environment. More precisely, scenario planning helps to identify specific future uncertainties, and diverse realities of what future of the business might look like. Such an approach looks beyond the usual horizons of 3 to 5 years and helps businesses to develop strategies for different possible futures. This paper describes the four plausible future scenarios for the TV and video industry based on the current trends in the industry and informed opinion about potential future developments.

The highly dynamic nature of TV and video market is characterized by disruptive digital players, emerging new markets, and quickly changing customer demands. Therefore, what businesses in TV and Video industry decide today will influence the future market structure, technological standards, and customer relations in a significant manner. Conventional strategic analysis is not quite effective in such uncertain environments; therefore, it is necessary to develop a set of future scenarios, each of them depicting a certain plausible world which significantly differs from other scenarios. In this sense, scenarios are a narrative of alternative future reality in which current decisions might play out. This will help strategic planners to consider the driving forces and change their business strategy appropriately.

The Scenario Development Process

The scenario development process includes 4 major steps, namely, identification of driving forces, identification of critical uncertainties, developing a range of plausible scenarios and discussing their implications.

Identification of Driving Forces

The process begins with a discussion of what are going to be the major changes in economics, politics, society and technology in the future and the way such changes might affect the organization or industry.

Identification of Critical Uncertainties

After the identification of driving forces, the most important driving forces are selected based on their impact on the business.

Developing a Range of Plausible Scenarios

Moreover, after determining the most important driving forces, a matrix is formed which illustrates the direction of each uncertainty and where it will take the organisation. Four possible scenarios are then developed for the future.

Discussing the Implications

In the final step, various impacts and implications of each scenario is discussed in order to reconsider the future strategy of the business.

Future Scenarios of Tv and Video Industry

Driving Forces

Driving forces in the TV and Video industry are as follows:

Technology – In terms of technological changes, the key driving forces for the TV and Video industry include net neutrality, TV advertising measurement, Digitalization of video/TV production process (3wnews 2020) and the innovative capabilities of video suppliers (Au-Yong-Oliveira, Marinheiro and Tavares 2020). In addition to this, the AI tools will also have a significant impact on the production and delivery of the content (Budzinski, Gänßle and Lindstädt 2020). Moreover, these changes will also affect the format and length of video advertising, for instance, holographic TV advertising and will also affect the prices of the same. The said industry might also track customers with built-in sensors to enhance the value it delivers. This will also change the role of broadcasters and attractiveness of national video sector for talents, along with the transmission/frequency, cloud operations, multichannel networks, and the degree of personalized content (Carrillo Vera and Aguado Terrón 2019). There is also the possibility of blockchain-based technology application in content trading platforms (Castro and Cascajosa 2020).

Society – Level of exclusive content in national broadcasting, demand for on-demand content and relative importance of linear broadcasting in comparison with non-linear/ on-demand services are some of the key changes in societal aspects (Deloitte 2020). Furthermore, the quality of digital infrastructure will also affect the industry under consideration, along with the requirements for employees in media. Given the advent of AI technology, the ability of AI to influence audience is also relevant for the industry. This will also change the video/tv consumption behaviour, including the fiction focus of TV, the focus of user engagement, user multitasking and demand for virtual/augmented reality offerings (Emarketer 2020).

Additionally, the digital capability of the general public is also an important factor besides the influence of ageing viewership, average time spent with TV/Video, sensitivity regarding data privacy and legal restrictions in national advertising.

Environment - The current trends in the industry suggest that environmental considerations will not change considerably, and organizations will mainly have to focus on corporate social responsibility (Xiang, Ran and Xu 2020). This mainly includes increased engagement in the CSR activities such as reduction of waste, development of communities and developing socially-oriented educational content (Wagener 2020).

Politics – Political factors will also have significant influence over the future of TV and Video industry. Changes in political factors include the level of intellectual property regulation, content rights, the introduction of media regulation for online/mobile pure offerings (Steiner and Xu 2020). In addition to this, companies will also have to deal with the regulation of media company ownership, level of market regulation and national economic climate. Political approach against piracy is another key factor which will shape the future of the industry (Rajala and Korhonen 2020). Considering the content will be easily accessible to all, companies will also have to make the changes in child protection legislation into consideration, along with national content quotas and the existence of the European Union. Political factors such as education on media/video use in schools and global media/content regulation will also influence the national video market (Poretski, Zalmanson and Arazy 2019).

Economic – In respect of economic factors, the said industry is mainly driven by content aggregators, spending on TV advertising and the importance of sport/event licensing, along with cooperation between industry players and the number of content producers. Ownership of sports rights, the convergence of advertising markets and diversification of players will also impact the future of the TV and Video industry. Entry restrictions in the market by tech/internet giants are also of key importance along with the role of over-the-top service providers (OTTs) like Netflix and Amazon (Parrotanalytics 2020). Global media market consolidation and polarization of advertising into sales and brand are another economic factors which should be taken into consideration, along with the disruptive changes in release windows, degree of interdependence between TV and social media. Online shopping can also be integrated into the content which will determine the way content producers and suppliers will perform, along with the ration of pay-per-use vs subscription-based payments (Nelson 2019).

Critical Uncertainties

In this step, the aforementioned driving forces are evaluated based on their degree of uncertainty and their degree of impact.

Table shows the aforementioned driving forces based on their degree of uncertainty and their degree of impact.
graph shows the aforementioned driving forces based on their degree of uncertainty and their degree of impact.

4 Plausible Future Scenarios

On the basis of the degree of impact and uncertainty of the driving forces the two most important driving forces for scenarios are:

  1. Drivers with high impact and clear evolution

  2. Drivers with high uncertainty and high impact on the industry

These drives are highly relevant and uncertain which makes them crucial for the next step of developing scenarios. However, it orders to develop future scenarios, one also needs to review the opinion of market experts.

Key points regarding the expert opinion for the future of TV and Video industry is as follow:

  1. Digitalization will transform the distribution and production of the content, as all IP becomes standard for content distribution. 5G networks and fibre infrastructure will be able to handle a huge load of traffic and will further drive the digitalization process (Grandviewresearch 2020). AI technology and analytics will allow users to receive smart recommendations and content discovery (Garcia-Perdomo 2020).

  2. Experts also suggest that advertising will become more targeted as new formats will adapt to advertising. They will leverage customer data to hyper-target content and ads which will maximize value creation (Fung 2019).

  3. On-demand and linear content will coexist and will be of equal importance. While the on-demand video will become mainstream in every region, the linear TV will remain substantial, especially in live content (Emarketer 2020).

  4. Market regulation will be lessened, and the market will become moderately regulated. This will lead to a reduction in regulatory pressure and will result in more freedom for market players.

  5. Direct revenue and advertising will remain most relevant and will generate new streams of revenue. Innovative pricing strategies will prevail in market and customer data will be used for monetization.

  6. The industry will be partially consolidated, and new and existing players will reposition themselves along the value chain.

Based on the informed opinion of market experts, the 4 plausible future scenarios for TV and Video industry are mentioned below.

graph represents the 4 plausible future scenarios for TV and Video industry

Scenario 1 - Content supermarkets

Under this scenario, digital platforms have taken the dominant role in the distribution and aggregation of content. They control the market and have taken over the value chain including direct consumer relationship, creation of content and its distribution. Moreover, each digital platform provides an extensive range of national and international content just like a supermarket. The only difference is created by some exclusive rights for sports and productions.

Scenario 2 - Dominance of large global content owners

In scenario 2, large global content owners have integrated vertically along the value chain and are dominating the market. In addition to this, they started to withhold and withdraw content form digital platforms and use their own channels for delivery. Content owners are bypassing the established platforms and are using their own channels to create a direct relationship with the target audience.

Scenario 3 - Revenge of broadcasters

Under this scenario, national broadcasters have secured a strong position by effectively executing their digital transformation. They have changed into digital platforms and are delivering on-demand content directly to the customers. National broadcasters have also entered new services, namely recommendation function and targeted advertising which was previously controlled by digital platforms.

Scenario 4 - No dominant players

In the fourth scenario, the entire industry has transformed into a diverse ecosystem with no dominating players. In its place, customers are served by different platforms. The main concern in this scenario is of protecting the local content, therefore, strong regulations are in place to do so.

Impact and Implications

Scenario 1 - Content supermarkets

Content producers need to concentrate on positioning and implementation of sound brands for content. This will improve their bargaining position while negotiating with content distributors. Moreover, content brands should seek global leverage and license.

Scenario 2 - Dominance of large global content owners

Either via subsidiaries or directly, large content producers must invest in global content production to compete with global competitors. On the other hand, smaller content producers and broadcasters should position themselves as national partners through strongly branded, local and unique content (Deloitte 2020).

Scenario 3 - Revenge of broadcasters

Broadcasters need to monitor market conditions in this scenario. Also, they must be aware of the regulatory framework and political role in the TV and Video market (Castro and Cascajosa 2020).

Scenario 4 - No dominant players

Each content producer and broadcaster need to emphasize its own strengths, and only appropriate investments and focused strategy will enable one to secure a strong market position.

Conclusion

In conclusion, considering the dynamic nature of TV and broadcasting industry, it is not surprising that its future is uncertain and includes many different alternate realities. However, considering the key drivers behind the industry the most probable future scenarios include the dominance of digital platforms, the dominance of large global content owners, the dominance of broadcasters or an industry with no dominant players.

References

3wnews. 2020. Video streaming market 2019 new innovation trends. Available at: https://3wnews.org/uncategorised/1044552/video-streaming-market-2019-new-innovations-trends-research-global-share-and-growth-factor-till-2026/

Au-Yong-Oliveira, M., Marinheiro, M. and Tavares, J. A. C. 2020, April. The Power of Digitalization: The Netflix Story. In World Conference on Information Systems and Technologies (pp. 590-599). Springer, Cham.

Budzinski, O., Gänßle, S. and Lindstädt, N. 2020. The Battle of YouTube, TV and Netflix–An Empirical Analysis of Competition in Audio-visual Media Markets. TV and Netflix–An Empirical Analysis of Competition in Audio-visual Media Markets (March 31, 2020).

Carrillo Vera, J. A. and Aguado Terrón, J. M. 2019. The eSports ecosystem: Stakeholders and trends in new show business. Catalan Journal of Communication & Cultural Studies, 11(1), pp.3-22.

Castro, D. and Cascajosa, C. 2020. From Netflix to Movistar+: How Subscription Video-on-demand Services Have Transformed Spanish TV Production. JCMS: Journal of Cinema and Media Studies, 59(3), pp.154-160.

Deloitte. 2020. Digital media trends summary. Available at: https://www2.deloitte.com/us/en/insights/industry/technology/digital-media-trends-consumption-habits-survey/summary.html

Emarketer. 2020. TV advertising – Reports, statistics and marketing trends. Available at: https://www.emarketer.com/topics/topic/tv-advertising

Fung, A.Y. 2019. Fandomization of online video or television in China. Media, Culture & Society, 41(7), pp.995-1010.

García-Perdomo, V. 2020. Re-Digitizing Television News: The Relationship between TV, Online Media and Audiences. Digital Journalism, pp.1-19.

Grandviewresearch. 2020. Video streaming market size, share and growth report. Available at: https://www.grandviewresearch.com/industry-analysis/video-streaming-market

Lobato, R. and Sarkar, P. 2019. The OTT TV Box as a Diasporic Media Platform. Media Industries Journal, 6(2).

Nelson, R. 2019. Future trends in I&M: Industrial strength security. IEEE Instrumentation & Measurement Magazine, 22(6), pp.33-34.

Parrotanalytics. 2020. TV industry insights. Available at: https://www.parrotanalytics.com/insights/

Poretski, L., Zalmanson, L. and Arazy, O. 2019. The Effects of Co-Creation and Word-of-Mouth on Content Consumption–Findings from the Video Game Industry.

Rajala, J. and Korhonen, A. 2020. Streaming wars: competitive dynamics in the online video streaming industry.

Spaniol, M. J. and Rowland, N. J. 2019. Defining scenario. Futures & Foresight Science, 1(1), p.e3.

Steiner, E. and Xu, K. 2020. Binge-watching motivates change: Uses and gratifications of streaming video viewers challenge traditional TV research. Convergence, 26(1), pp.82-101.

Wagener, M.C. 2020. The effect of Netflix on movie piracy and its impact on the movie industry (Doctoral dissertation).

Xiang, D., Ran, X. and Xu, Z. 2020. Construction of Ultimate Video Experience and Application Innovation System Based on 5G and 8K. In Data Processing Techniques and Applications for Cyber-Physical Systems (DPTA 2019) (pp. 35-41). Springer, Singapore.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Strategic Management  Assignment Help

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