Perhaps the most interesting statistic is that online viewing and live streaming is not a generational thing. Certainly, two in five 16 – 24 year olds say they would rather watch on a non-television device. But Ofcom found rates of streaming rising 25% for 55 to 64 year olds, and by 12% for the over 65s.

In the US the differences are perhaps less marked. Neilsen, the advertising analytics body, produced this research:

Overall, it is clear that the media landscape continues to change dramatically. While it is likely that the enforced isolation of covid-19 has driven many people to explore new sources of content, the shift from linear broadcast to on-demand online content was already moving rapidly with unstoppable force.

Advertising

Television remains the big player in advertising sales. According to IMARC, the global television advertising market was $278 billion in 2020, a staggering number. For comparison, the video streaming market was $50.11, but growing at a CAGR of 21% to 2028 (Grand View Research). Given the growth in online advertising almost certainly means a reduction in television advertising, we can expect to see parity in the next few years.

That is despite the common feeling that most viewers now ignore advertising. Certainly our research found that two-thirds rarely or never watch a full set of video commercials uninterrupted, with only 6% “often” doing so.

 There are several key differences between the way that advertising is delivered on television and online, which will affect the way that advertisers direct their spend.

On television, there are limits on the amount of advertising. In Europe, the general rule is 12 minutes of advertising in any hour. Different countries have their own rules on when advertising is permissible: Austria does not allow centre breaks; German public service television has no advertising after 20.00.

There are also regulations on what can be advertised. Tobacco and alcohol are controlled to a greater or lesser degree. Fast food may be banned from children’s programmes. Actors taking leading roles in programmes should not appear in commercials within those programmes, although this rule seems to be largely ignored.

The internet, on the other hand, is the wild west: anything goes. While the major players will want to appear to be responsible hosts for advertising, in a global market streamers can deliver what advertising they want, in whatever quantities they think their audiences will tolerate.

The other key difference is that broadcasting delivers more or less the same commercials to all its audience, whereas streaming services have a closer relationship with individual consumers, and can therefore target advertising to the likely preferences of each viewer. It is perfectly possible to deliver a unique advertising selection to each consumer, although most feel that revealing precisely how much you know about your viewership may be not the best policy.

Tailored advertising is possible even in live streams, thanks to server-side dynamic advertising replacement. Essentially, this drops the required commercials into the video stream before the delivery encoder for a seamless experience.

There is some interest in dynamic advertising replacement for broadcast services, using similar technology. It provides slightly more granularity in the demographics, but even if anyone wanted it, broadcast services could never approach tailoring down to the individual.

Conclusion

Certainly, in the developed world where fast broadband is commonplace, we can expect to see an increasing reliance on video streaming. That includes catch-up services, video on demand and live streaming.

Given the relatively low cost of entry – no need to be licenced or sign high value, long term contracts with satellite providers and the accessibility of cloud playout and storage – we can also reasonably expect to see the number of video streaming services to grow.

Traditional broadcasters are not going to roll over and die, though. They have the advantage of being trusted brands, and of having the ability to signpost new content. One of the big challenges of streaming services is discovery: broadcasters can tell you to watch something; on a streaming service you have to find it, which can be a problem if you do not know what you are looking for.

Broadcasting – terrestrial, cable and satellite – is a well proven technology, delivering identical quality whether there is one person watching or 20 million. There are too many stories of online services going down under high demand for viewers to trust them completely.

This need for guaranteed reliability and quality, together with trusted brand status, means that consumers will continue to turn to the major broadcasters for key events. As the pandemic gathered pace, the BBC reached an audience of more than 20 million for its evening news bulletins in March 2020. Her Majesty the Queen addressed the nation on 5 April 2020 and was watched by over 14 million.

When England’s footballers made it to the final of the Euros, 29.85 million watched the entire game (split across the two rights-holding broadcasters). The audience peaked at almost 31 million during extra time.

Aside from broadcast’s ability to reach large audiences, there is another factor which may come into play: online streaming is really not very green. The internet – essentially a chain of data centres – is a massive consumer of energy. According to KTH, the Royal Institute of Technology in Stockholm, the internet (80% video, remember) now uses 10% of the world’s total energy consumption.

To put it another way, the internet had the same CO₂ footprint as air travel in 2019 before the pandemic slashed the number of flights. And the internet is growing faster than aviation. A green backlash may not have a major impact, but it could see some users reluctant to go online.

The future, then, is hybrid. Traditional broadcasting via playout is ideal for live events – sport, entertainment competitions and more – and for trusted news. For entertainment, consumers are likely to want their access any time, any place, any device.