Articles audiovisual

The Future of Audiovisual: Linear and Non-Linear Services

by Emilio Pucci | 02.10.2019

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Over the last ten years the evolution of the audiovisual market has been strongly marked by the distinction between linear and non-linear services – meaning “traditional” television with its scheduled offer of channels and programs on the one hand, and content available on demand in streaming or following a download on the other.

This distinction has generated a significant shift in the practice of content distribution and consumption, having delineated a field of new market assets. The most important newcomers in the audiovisual market – such as Alphabet / YouTube, Apple, Netflix, Amazon – have largely dominated and dominate the non-linear market, while familiar broadcasters still lead the linear market, at the same time stepping into the non-linear market. This is the case of free-to-air operators that own catch-up TV platforms or similar services offered by pay-tv platforms (as for online extensions). Practically all major broadcasters have developed non-linear pay-tv offers in SVoD (Subscription Video on Demand): just to mention a few, the Mediaset group with Infinity TV or the Sky group with NowTV.

The linear / non-linear distinction has crossed and crosses the entire audiovisual supply chain vertically, increasingly involving the production field with a remarkable increase in titles conceived and created for the online environment as their primary consumption platform.

Considering the relevance this dichotomy has taken on over this decade and the many sectors it has affected within the audiovisual industry (distribution, consumption, competitive assets and even production), it is now legitimate to wonder whether it will continue to play an equally important role over the next decade, as well. And that is, if the market and industry will continue to evolve according to this distinction, or whether it will be less and less relevant, or perhaps even become obsolete.

In the first case, let’s say that the well-known prediction of Reed Hasting, founder and CEO of Netflix, would take place. According to this, the linear market is destined to decline, with the exception of a few products only, such as sports events and other flow programming. Much of the audiovisual product would be consumed on demand, meaning in a non-linear way. Catalogues or libraries would almost completely replace programming, and consequently drive traditional networks to a definitive decline. There are numerous data that support this vision today – first of all those on the decline of time spent by viewers in front of the TV. In recent years, TV consumption has in fact drastically reduced in some segments of the population, a trend that can be considered the result of a radical shift towards non-linear consumption.

In an opposite or at least different scenario, the distinction between linear and non-linear services could have a lower impact and less relevance for the audiovisual market in the long run. This would depend essentially on two factors: the first involves the strategic and competitive skills of broadcasters or non-linear operators. The second is mainly a technological factor, or better, a “platform” factor.

As for factor number one, broadcasters could compete more convincingly with non-linear operators by adopting strategies that involve substantial investments, alliances and production heightening. In order to do this, consortia are a valuable solution. In 2020, for example, French broadcasters TF1 and M6 will be launching a SVoD service (Subscription Video on Demand), to compete directly with Netflix. The same goes for the British BritBox, a joint venture between BBC and ITV, soon to be launched on the domestic market. Competing on the on-demand market is mainly a competition on produced and acquired valuable rights – nothing more than what has always taken place on the linear market. So in a medium-long term, broadcasters could catch up and become important players on the non-linear field, reducing the market’s asset gap.

Not at all less important is the technological factor. With an increase of the evolution and diffusion of new generation connected televisions and advanced EPGs (Electronic Program Guides), users are becoming less and less interested in the linear / non-linear distinction, and can now access all platforms from a menu and easily consult the entire offer available at moment, independently whether the chosen product has an origin that is “anchored” to a broadcaster/program or to a nonlinear service/library.

Rather than being presented as different services in contrasting environments, linear and non-linear services are becoming integrated into hybrid consumption systems that slide seamlessly from one to another, that is, without the viewer’s perception of this distinction. This is actually the “philosophy” behind Sky’s SkyQ box: the idea is to dominate and control the environment where linear and non-linear are integrated and complement each other. In a certain way, this is also Amazon’s attitude that unlike its competitor Netflix, aims to increase the number of live channels on its platform.

Traditional players of linear services that invest significantly in the non-linear sector, today are well aware of the fact that the competition with significant Internet players isn’t based as much or only on the creation of alternative or symmetrical platforms but on the control of those systems (platforms) that can enhance their products in a hybrid linear / non-linear context.

Average time spent daily on television viewing in the UK by age group (in minutes)

Source: BARB