Table of contents
2 The moving image market in the course of time 2.1 The historical development of television 2.2 From TV to Smart TV HbbTV 2.0 2.3 Fragmentation and convergence
3 The digital transformation of the moving image market 3.1 "Video on Demand" – Definitions and Delimitations 3.2 Relevant players within the VoD market
4 Changing media usage behaviour 4.1 Media use at a glance 4.2 Moving image use linear / non-linear 4.3 Device usage at a glance 4.4 Digital natives in the focus of attention 4.5 Usage motives (linear / non-linear) in comparison
5 The importance of moving images as an advertising medium 5.1 The advertising market at a glance 5.2 The relevance of the "mass medium TV" 5.3 Adjustments in classic TV planning 5.4 Addressable TV as a useful addition
6 Outlook and conclusion
Never before has the media landscape in Germany developed as dynamically as in recent years. Smart TV and mobile devices such as smartphones or tablets open up new ways for users to access increasingly diverse media offerings. In particular, the offerings of the increasingly digital moving image market have changed significantly in recent years.
Technical progress and the associated digitization have significantly changed the possibilities of media communication in recent years. Through the networking of the media via the Internet, as well as the spread of mobile devices, new content-related information and entertainment offers and new ways of use have emerged. As a re-sult, various convergence processes of a technical, social and economic nature have taken place.
With regard to classic linear television, this means that new players, such as Netflix and Amazon Video, have been able to establish themselves in the market and streaming enables a new way of watching. The viewer benefits from an increased user-centeredness and has the opportunity to decide independently about the pro-gram. He can see what he wants, when he wants and where he wants. This also poses a challenge for established television companies, as the competition for the audience market – especially within the younger age group – has become ever greater.
The question therefore increasingly arises as to what relevance classic linear televi-sion will still have in the future and how big the newly created streaming portal competition really is now.
This bachelor thesis takes up this topic and shows what effects the changed media usage behavior has on the classic TV market. In addition, the challenges that arise for traditional television stations are shown and the measures they are taking to counteract the progressive trend of audience churn are presented.
2 The moving image market in the course of time
With the current digitalization, the development of the German television system is going through an important phase that has contributed to a structural change in the media system.
In order to get a feeling for the current situation of the German television landscape and what milestones have already occurred within the history of television, the fol-lowing chapters deal with the history and historical development of television, among other things. Furthermore, it is shown how the classic television set has evolved technically over time and has now become part of a networked home.
In addition, the increasing fragmentation is addressed, as well as the convergent de-velopments within the market analyzed.
2.1 The historical development of television
The foundation for the transmission of moving images was laid in 1884, with the development of the Nipkow disk. From then on, images could be broken down into chiaroscuro signals and reassembled. With the development of the cathode ray tube in 1897, which is also referred to as Braun's tube, image information could now also be transmitted.
The first technical television broadcast took place as part of the International Radio Exhibition (IFA) in Berlin in 1928 and is thus regarded as the birth of television. From the mid-30s, television broadcasts could also be broadcast in picture and sound, so that, among other things, the Olympic Summer Games, which took place in Berlin in 1936, could be followed on the television. However, since there were only a few television receivers or receivers at that time, public television rooms were in-creasingly set up in the major German cities, which, however, had been used primari-ly for propaganda purposes of the Nazi regime.
"Against the background of the experiences with a media system brought into line under totalitarian National Socialism, the Allies ensured a reorganization of the press, film and radio between 1945 and 1949, which continues to have an effect to-day." Due to the political conditions of the immediate post-war period, as well as the efforts of the Allies to democratize Germany, after the Second World War only public state broadcasters were initially permitted in the Federal Republic of Germa-ny.
In 1952, the first German television station, today's ARD, began broadcasting and broadcast the Tagesschau for the first time. On July 10, 1962, the Telstar satellite was launched into orbit, the first active communications satellite. in In the course of the 60s, more public broadcasters were added and more and more households in-vested in a corresponding television set in view of the growing popularity and the improved reception quality. With the introduction of colour television in the era of Willy Brandt (International Radio Exhibition 1967 in Berlin), a new era of television was initiated. As a result, television became more and more a mass medium and be-came increasingly important.
In the 1980s, the introduction of teletext took place, which made it possible for the first time to broadcast program-supplementing data. In addition, cable and satellite created new reception channels that had an increased transmission capacity and could thus deliver a higher number of programs to the viewer. The way was open for many new, now privately organized channels and due to the fourth broadcasting judgment of the Federal Constitutional Court of November 1986, now also political-ly desired and legally permissible. Since then, the dual broadcasting system has ex-isted in Germany, which consists of public and private programme providers.
2.2 From TV to Smart TV HbbTV 2.0
Due to digitization and technical change, the television has left its one-dimensional existence and is increasingly regarded as the control center of various applications.
The term "Smart TV" usually summarizes all services and offers that are available on the TV via the Internet. Become a TV increasingly designed with integrated Inter-net access, as well as pre-installed and downloadable applications, thus offering the user increasingly complex possibilities of interaction. While the term smart TV is more general, the abbreviation "HbbTV" (Hybrid Broadcast Broadband Television) refers to an open standard that allows it, receive extensive information and naviga-tion links to the current program. The technology behind it is considered the unof-ficial successor of the antiquated teletext and links TV with Internet content.
In addition, "over-the-top television" (OTT) has developed, a new technology that enables the streaming of moving images without the involvement of an Internet ser-vice provider. These include the paid streaming services of Netflix, Amazon Prime, Sky Go, Dazn and the Eurosport Player.
Figure 1 below shows that the share of smart TVs in classic TV sales has increased significantly in recent years. Meanwhile, more
Abbildung in dieser Leseprobe nicht enthalten
fig. 1: Share of Smart TVs in TV sales in Germany (in %)
(Source: Statista GmbH , o.S.)
than two-thirds of the televisions sold today have access to the Internet. It can be assumed that this value will continue to increase in the coming years, as almost ex-clusively Internet-enabled televisions are now produced. This trend can also be seen in Figure 2, which shows that 18.09 million households in Germany have already connected their Smart TV to the Internet.
fig. 2: Proportion of households in Germany with Smart TV connected to the Internet
(Source: AGF Videoforschung GmbH , p.1)
Due to technical progress, image quality has also improved significantly in recent years. Nowadays, the majority of televisions have the so-called HDTV standard (High Definition Television). In addition, UHDTV (Ultra High Definition Televison) is the starting signal for ultra-high-definition television.
Even today, the television is considered by many people as a prestige object, in which it is above all the dominance of the screen diagonal, as well as the latest state of the art. "In the course of the very rapid introduction and spread of new screen technology, such as LCD, then LED and in parallel plasma, the conventional television set was quickly replaced. Falling prices have significantly lowered the threshold for purchasing a high-definition TELEVISION that also has online intelligence."
A few years ago, the change from a tube TV to a flat-screen TV was considered a sign of modernity and prosperity, but now almost everyone can afford a good TV. This is also shown by the decline in the consumer price index for televisions shown in Fig-ure 3, which more than halved from January 2011 to September 2018.
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fig. 3: Monthly consumer price index of televisions
(Source: Statista GmbH, , o.S.)
2.3 Fragmentation and convergence
"The digitization of communication triggers a number of economic, technical and social convergence processes. The focus is not only on the opportunities and poten-tials of media networking, mobility and social virtualization, but also on challenges with regard to the fragmentation of the public, a concentration of providers and new forms of information filtering or selection."
Since the beginning of the dual broadcasting system in 1984, the range of channels on offer in Germany has steadily increased. Due to the increasing number of pro-gram alternatives, diversification diversified the television landscape. This also had an impact on the average donation per station, which fell due to the constant de-mand. A new phenomenon called zapping established itself through the growing number of choices. The fragmentation of the media market therefore also character-izes a situation in which society, due to the large number of offers, shares only a few media experiences with each other.
Even today, new linear transmitters are added regularly, which unfortunately makes it almost impossible to give an exact overview of the number of stations. However, Figure 4 below is intended to give an impression of how much the diversity of chan-nels has developed in recent years and which digital portals, with the emergence of the Internet, have been added over time.
Abbildung in dieser Leseprobe nicht enthalten
fig. 4: Fragmentation of the moving image market
(Source: Own presentation, , o.S.)
In addition to the established television companies, other providers have also been able to establish themselves in the market in the course of digitization. "Publishers have entered the market with online videos, originally mainly hardware producing companies such as Apple offer audiovisual content and others such as Google and Yahoo come from the web world. Completely new companies develop their own formats or want to exploit existing ones." This phenomenon of convergence of pre-viously unconnected areas is also known as convergence. Convergent processes can innovate due to interactions. This creates new market contours that can lead to a change in existing value-added activities.
The boundaries within the media sub-markets are becoming increasingly blurred and journalistic and economic competitive pressure are increasing significantly. In addition, a competition from outside the industry, which, in contrast to traditional media companies, has no journalistic competence. These include above all companies from the telecommunications sector that enable technical access, as well as a large number of new players who operate online platforms for blogs, podcasts, search en-gines, social networks and videos, for example.
The current change in the moving image market and investments in new technolo-gies are causing jobs to be cut in more traditional professions (e.g. the classic televi-sion technician). However, it should not be forgotten that this will also create many new jobs that have not previously existed in this way. The boundaries between edi-torial and technical work are merging more and more and the range of tasks is be-coming more diverse and complex.
The shifts in the market environment listed above can also be well illustrated by Michael E. Porter's "Five Force Model of Industry Structure Analysis" (see Figure 5).
Abbildung in dieser Leseprobe nicht enthalten
fig. 5: Market environment for television and radio providers
(Source: Egger, A./Eimeren, B. , p. 109, based on Michael E. Porter)
The figure above shows that rivalry among competitors has increased. In the in-tramedia competition, new stations have established themselves over time and in the intermedia competition, in addition to a large number of editorial Internet of-fers, new print products (e.g. BARBARA, chef, etc...) have been successfully estab-lished in the market.
In addition, with YouTube, Facebook, Amazon, Netflix and Co., many companies have emerged in recent years away from the classic linear television world, which have launched substitutes on the market with their digital portals, which has further in-creased the competitive pressure.
Companies from adjacent markets are also trying to gain a foothold in the moving image market with innovative streaming portals. With Magenta TV (formerly Enter-tain TV), Deutsche Telekom has created a streaming service in which, among other things, it is possible to start the playback of selected programs with a delay (7-day replay), to stop current programs from the beginning (restart) and running formats at any time and to continue watching late (timeshift).
Furthermore, companies that operate in the upstream and downstream markets are becoming increasingly important. Suppliers, such as Rights holders or licensors en-joy the number of increased exploitation possibilities, as do the manufacturers of the respective end devices, which can lead to high sales figures.
The downstream market is mainly characterized by the user of the respective medi-um. The increased competitive situation and the high media offer offer completely new possibilities for them to linger. He enjoys dealing with the new innovative ap-plications and benefits from being able to decide for himself when, how and where he wants to watch which programme.
3 The digital transformation of the moving image market
"The abolition of the narrative linearity of analog media and the erosion of collective rhythms, in which the tense as an abstract principle superimposes the content to-wards a time- and place-sovereignty use of content "on demand", stand for a change in traditional usage styles."
The effects of the digital transformation of the moving image market can be seen most strikingly in the fact that the number of conventional video stores has fallen sharply in recent years. Towards the end of the 2017 financial year, the Interessen-verband des Video- und Medienfachhandels in Deutschland e.V. was able to record a total of 587 conventional video stores in Germany. A year earlier, this figure had been a total of 914. The classic stationary video stores lack customers. While video stores were able to score points in the past with a wide range of films from all gen-res, today they have no chance against the multitude of online providers. "The busi-ness model of video stores has been transferred one-to-one to the Internet - instead of having to go to a shop, borrow a DVD and bring it back later, a few clicks are enough today."
This can also be seen in Figure 6 below. This shows the number of active video con-sumers after their access to videos in Germany in the years 2012 to 2017. It can be seen that the number of people who have physically borrowed their films from vid-eo stores has fallen sharply over the past five years. In 2012, the number of people who borrowed a film from the video library was still a total of 6.2 million users. In 2017, however, only 2.6 million users. The number of people who bought a DVD for their domestic film enjoyment has also fallen in recent years from 15.9 million in 2012 to 10.9 million in 2017. On the other hand, digital sales via streaming portals and video-on-demand solutions have increased significantly in recent years (see de-velopment of SVoD, TVoD and EST in Figure 6). The reason for this lies in the techno-logical developments already described in the previous chapters.
Abbildung in dieser Leseprobe nicht enthalten
fig. 6: Number of active video consumers according to their access to videos in Germany in the years 2012 to 2017 (in millions)
(Source: Statista GmbH [2019a], o.S.)
3.1 "Video on Demand" – Definitions and Delimitations
Video-on-demand (VoD) refers to the possibility of supplying viewers with video material via the Internet on request. With VoD, content can be accessed via stream or download (complete or progressive). "Streaming or livestreaming refers to the (real-time) transmission of content, usually image and sound. Instead of a video file, which must first be transmitted in its entirety, streaming transmits a stream of data that is played in parallel at the receiver."
Streaming plays pictures, videos, and sound without the content being played on the playback device's local memory. During the streaming process, a continuous data packet transmission and the associated direct processing takes place. With pro-gressive download, on the other hand, the video is saved to the respective hard disk and converted into a temporary file. The difference to the classic complete download is that the video can already be viewed during the download process, provided that enough data has been pre-stored beforehand.
In general, the VoD segment distinguishes between download-to-rent and download-to-own. In addition, various payment models have developed in recent years. The following list is intended to give an overview of the most relevant VoD models and illustrate them with an example.
Advertised Video-on-Demand (AVoD)
... means a model in which the use of video is offered free of charge to the user. Simi-lar to classic television, however, it is an advertising-financed offer, so users are regularly confronted with advertising on the respective portal.
Free Video-on-Demand (FVoD)
... means a model in which the use of video is offered completely free of charge and no advertising is played to the user. FVoD portals are often operated on behalf of the public, similar to the media libraries of public broadcasters in Germany.
Subscription Video-on-Demand (SVoD)
... means a subscription-based model (monthly or annual subscription) in which the Subscriber receives unlimited access to (usually) all Program Content for a periodic fee.
Transactional Video-on-Demand (TVoD)
... refers to a business model in which content is billed individually, i.e. after actual use (pay-per-view basis). TVoD can also be divided into two areas. On the one hand, there is the possibility to access an application (feature film or similar) for a limited time, but on the other hand, there is also the possibility to acquire a temporally un-limited right of use by means of electronic sell-through (EST), which thus enables the user to have permanent access.
3.2 Relevant players within the VoD market
In order to get a better understanding of which players are active within the VoD market and what relevance they have in the user market, Figure 7 below gives a good overview of the current situation in Germany.
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fig. 7: VoD offers used (use at least. Once a month)
(Source: die medienanstalten – ALM GbR , p. 49)
The results listed above, which were commissioned as part of the digitization report of the media authorities, show that a total of 34.5% of the German population aged 14 and over uses video portals at least once a month. Unchallenged in 1st place of the most used video portals in Germany is Youtube with almost 24 million monthly users (34.2%).
"The media libraries of the television stations have cracked the 20 million mark for the first time this year and reach a good 31.2% of the population with their offers. Almost one in three (29.3%) uses the offers of Amazon (Prime Video), Netflix or an-other streaming service, which corresponds to a growth of 27% compared to the previous year." The use of streaming services is thus only just behind the media libraries of the TV stations.
In addition, netflix, with regular use by 19.2% of the population, is only just behind its competitor Amazon (Prime Video) (19.5%). Despite the paywall (also called pay-wall), the two SVoD offers each reach about 13.5 million people and are thus larger than the media libraries of the private broadcasters, which reach only 11.6 million regular users. However, it should not be forgotten that SVoD subscriptions are often used by several people and that free trial subscriptions are also more common.
Prime Video (formerly Amazon Video), was created by the merger of Amazon Prime and the Amazon-operated online video library Lovefilm in 2014. The paid Prime membership is €5.75 a month (with annual payment) and offers a variety of feature films and series as well as the possibility to stream music. In addition, as a Prime member, the shipping costs for online shopping are largely attributable to Ama-zon.de.
One of Amazon's largest SVoD competitors in the German and international market is the US company Netflix. It was founded in 1997 by Reed Hastings and Marc Ran-dolph in California and initially began as an online film distributor with classic DVD shipping. Ten years later, Netflix developed into a streaming portal that over time increasingly invested in its own (exclusive) content and was thus able to establish itself worldwide. Today, Netflix operates as an SVoD portal with 130 million pay-ing members in over 190 countries, providing access to a wide range of series, doc-umentaries and feature films in numerous languages. Netflix offers different sub-scription variants, which differ only in the picture quality (HD or UHD), as well as in the number of devices on which Netflix can be watched at the same time. In terms of price, these are between 7.99 € and 13.99 € per month, whereby no costs are charged for the first month of use.
In addition, many other streaming portals have been able to establish themselves in the market in recent years, but until now it has not been possible to catch up with the reach of Prime Video and Netflix. Often these are mainly smaller providers who serve special niches. In 2016, for example, DAZN (pronounced: "The Zone") went on the market, which is a paid streaming service that has focused exclusively on sports content. Within the industry, DAZN is therefore also referred to the "Netflix of sports" denoted. Currently, DAZN owns the rights to broadcast the matches of the English Premier League, as well as the live broadcast of the matches of various top leagues such as Spain, Italy and France. In addition to football, DAZN also broad-casts many other sports, such as basketball, football or ice hockey.