Streaming services prompting a sea change in how we pay for TV services

Streaming services prompting a sea change in how we pay for TV services

When it comes to television, we are surely living through a golden era of entertainment.

Ever since Netflix arrived on our shores in 2012, the idea of television "where we want, when we want" has made steady gains upon Irish viewing habits, and changed habits forever.

Looking back, it seems an age since those early streaming services offered a paltry selection of ancient films and TV shows, hampered - much of the time - by poor download speeds or, in many areas, no access to online services at all.

With ever faster internet speeds has come a profusion of video streaming options, and a growing dilemma for traditional television providers as increasing numbers of consumers opt for streaming alternatives in a rapidly changing media landscape.

Netflix is the clear market leader at present, with a major catalogue of movies, shows and documentaries, plus its ever growing domain of original programming. With over 140 million subscribers globally, Netflix is spending up to €9bn annually on content, and has more than 50 projects currently in production between Ireland and the UK.

Also into the mix is Now TV, Sky television’s streaming service, offering entertainment, kids shows, cinema and sports packages. Another player growing in size is Amazon Prime, a relatively slow starter, but continuing to improve and enlarge its content.

Hayu is still relatively under the radar, specialising in reality television shows like Keeping Up With The Kardashians and Rich Kids of Beverly Hills. Into this already vibrant market is the imminent arrival of Apple TV+, set to go live in over 100 countries next month, and with the clear intention of challenging Netflix and Amazon Prime for viewership primacy.

Already creating waves due to the number of high-profile stars confirmed to be working on original content - including Steven Spielberg, Oprah Winfrey and Jennifer Aniston - Apple aims to hit the ground running in a crowded sector.

Another major brand in entertainment, Disney, is also launching its own video streaming service entitled Disney+, which will incorporate a combined Disney, Hulu and ESPN bundle.

Media giant AT&T is yet a further addition to the market with HBO Max, a demand service from its WarnerMedia Entertainment arm, and set to launch in the spring of 2020.

As a result of faster broadband and a wider selection of streaming services, traditional television viewing is under constant pressure to maintain a respectable share of the market. Even the recently proposed plan to replace the television licence with a flat broadcasting charge reflects the new reality.

As more people consume their entertainment on laptops and smart phones, the new fee will be known as a "device independent broadcasting charge" to cover the growing demographic of online viewers.

Acknowledging this sea change, Minister for Communications Richard Bruton said: "It is clear that, due to the nature of technological change and the movement towards digital devices, the design of the TV licence fee will have to change. This will future proof the funding model, taking account of changes in technology and in how content is now consumed."

Much of this current change in consumer habits has been well predicted, with research carried out by iReach in May 2016 on behalf of Pure Telecom finding increasing numbers ready to scrap their TV licence in favour of watching internet-only content.

Some 15% indicated they intended to stop paying the fee in the next five years, backed by a further 28% saying they would consider it.

Overall, of the 86% of online adults that pay for a TV licence, 36% said they will consider, or already intend on, ditching it by 2021. The survey also found that almost a quarter of Irish households had abandoned paid TV services, such as satellite or cable, due to an increase in viewing content online.

"Media consumption is evolving and internet traffic is at an all-time high due to customers watching and downloading content online," said Pure Telecom director Paul Connell.

Streaming channels are producing top quality original TV shows and movies, which people can watch at any time that suits them.

"However, streaming channels add another household bill to the mix, so people who are already active users of the internet are starting to think about what other expenses they can do without," he said.

In the UK a similar picture is emerging with up to half of all homes now subscribing to TV streaming services, according to the Ofcom Media Nations report, a comprehensive study of major trends in television, radio and audio in the UK that revealed rapid shifts in viewing habits.

The number of UK households signed up to the most popular streaming platforms - Netflix, Amazon Prime, Now TV and Disney Life - increased from 11.2 million - or 39% - in 2018 to 13.3m - 47% - in 2019. With many homes using more than one service, the total number of UK streaming subscriptions rose by a quarter in 2018 - from 15.6 million to 19.1 million.

Similarly, the number of households in the North signed up to at least one of the main subscription streaming platforms also increased, from 262,000 - or 36% - in 2018 to 340,000 - 46% - in 2019.

"The way we watch TV is changing faster than ever before," said Yih-Choung Teh, strategy and research group director at Ofcom.

"In the space of seven years, streaming services have grown from nothing to reach nearly half of British homes."

However, he added that traditional broadcasters still have a vital role to play, "producing the kind of brilliant programmes that overseas tech giants struggle to match. We want to sustain that content for future generations, so we’re leading a nationwide debate on the future of public service broadcasting."

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