Traditional TV: Diversify or Fall Behind

In the rapidly evolving media landscape, traditional television (TV) networks face an existential challenge: adapt or risk falling behind. The rise of streaming services, such as Netflix, Amazon Prime, and Disney+, has disrupted the traditional TV industry, forcing networks to reevaluate their business models and explore new revenue streams. This article explores why traditional TV must diversify to remain competitive in the digital age.

The shift in consumer behavior and viewing habits has been dramatic. Viewers now prefer the convenience, flexibility, and on-demand nature of streaming services. Traditional TV's linear programming model, with fixed schedules and commercial breaks, no longer aligns with the preferences of modern audiences. To survive, traditional TV networks must embrace change and adopt a more user-centric approach.

Diversification is key to the survival of traditional TV networks. By exploring new revenue streams and expanding their content offerings, networks can attract a wider range of viewers and remain relevant in the digital age. Here are some strategic diversification options for traditional TV companies:

1. Advertising-based video-on-demand (AVOD) services: Combining linear TV with AVOD services allows networks to offer additional content and generate revenue through targeted advertising. By leveraging user data from both platforms, networks can provide personalized recommendations and enhance the overall viewing experience. For example, German-based TV company ProSiebenSat.1 invested €50 million to launch the joint AVOD and SVOD platform, JOYN, with Discovery (Tusch 2019).
2. Subscription-based video-on-demand (SVOD) services: Integrating SVOD services with linear TV provides a steady revenue stream through subscription fees. By offering a more comprehensive content library, networks can attract a wider range of subscribers. UK Channel Four Corporation already released a trial SVOD premium version of its AVOD digital platform, All 4 (Channel Four 2019).
3. Combining AVOD and SVOD services: Offering both AVOD and SVOD services allows networks to cater to a broader audience, generate multiple revenue streams, and create a more integrated and seamless viewing experience. By leveraging user data and preferences across all platforms, networks can provide tailored content recommendations and enhance user engagement. The largest European media group, Bertelsmann SE, has diversified its business into upstream and downstream stages of the media industry's value chain, including both AVOD and SVOD services (Wider, Deeper, More Oblique: Diversification of Media Company 2024).

To effectively manage the organizational transition to diversified business models, traditional TV companies should focus on the following aspects:

- Content integration: Ensure that content is seamlessly available across all platforms, allowing users to switch between linear and VOD services easily.
- User experience: Develop a consistent and intuitive user interface across all platforms, making it simple for users to navigate and discover content.
- Data-driven insights: Utilize user data and analytics to gain insights into viewing habits, preferences, and trends, enabling better content curation and targeted marketing.
- Partnerships and collaborations: Form strategic partnerships with content creators, distributors, and technology providers to expand content offerings and enhance the overall viewing experience.

By embracing these strategic diversification options and focusing on the key aspects of the organizational transition, traditional TV companies can adapt to the digital age and remain competitive in the rapidly evolving media landscape. The future of broadcasting lies in a hybrid model that combines traditional television with streaming services, offering viewers a more personalized, on-demand, and flexible viewing experience.