Full stream ahead! Why Netflix, Amazon Prime and co are destined to pull the plug on traditional TV

May 2019: With so much uncertainty disrupting our lives in 2019, from Brexit and climate change to Game of Thrones’ tainted legacy, it’s perhaps reassuring to be certain of something in the future: the unabated growth and dominance of online streaming.

With so much uncertainty disrupting our lives in 2019, from Brexit and climate change to Game of Thrones’ tainted legacy, it’s perhaps reassuring to be certain of something in the future: the unabated growth and dominance of online streaming.

Traditional broadcast TV, predicated on an increasingly redundant business model, is facing an existential crisis as viewers continue to flock to streaming services. The landscape has become fragmented, allowing global players like Netflix and Amazon to dominate the market. Ofcom reported last summer that, for the first time, the number of UK subscriptions to such streaming services had leapfrogged traditional pay television subscriptions: 15.4m versus 15.1m. Don’t forget Netflix only entered the UK market in 2012.

We’re subscribing to multiple video streaming services at a greater rate than ever too. BARB (Broadcasters’ Audience Research Board) found that 12.3m UK homes in the final quarter of 2018 were signed up to either Netflix, Amazon Prime Video or Now TV – a 20% annual increase. The number of homes with two or more services had also risen by 32% to reach 4.3m. Meanwhile, ITV and BBC are set to launch a joint rival called Britbox in 2019, charging subscribers for mostly classic series. Over in America, AT&T (which recently acquired Time Warner), Walmart and Viacom will venture into streaming video services, teaming up with the likes of Comcast (owners of Universal Studios) and MTV Studios. Apple TV+ and Disney+ have also announced they are joining the party.

The share of bandwidth-hungry HD and Ultra HD video content was expected to rise from 4.5% to 21% between 2013 and 2018, according to Cisco. The popularity of 4K TVs is showing no sign of abating, but consumers should recognise that high-speed fibre-to-the-premises (FTTP) broadband connections are required to get the most out of such products and services. Netflix recommends users to have a steady internet connection of 25Mbps per device to enjoy its growing range of 4K HDR (High Dynamic Range) content. So with homes fast becoming multi-user environments, with the average property now having at least 12 digitally connected devices, it’s not difficult to imagine families and homeowners struggling to get the reliable speeds they need to keep everything switched on – and everyone happy.

Thanks to the growing implementation of full fibre networks by providers such as County Broadband, which remove unfit Victorian copper from our broadband infrastructure and allow for world-leading ultrafast speeds and reliability, today’s exponential growth of digital media consumption is exhibiting all the hallmarks of being the next internet revolution.

Let’s examine this a little further. Consumers are demanding more and more video content, of a higher quality and on more screens. Manufacturers are desperately keen to satiate this demand by providing more content. Others, such as business owners, are keen to share and save time, resources and skills over the internet. But they will be completely dependent on the infrastructure revolution: the delayed UK-wide upgrade from FTTC (fibre-to-the-cabinet) to FTTP. Only FTTP, which delivers ultra-reliable, lightning-fast speeds of up to 1,000 Mbps (10 times faster than FTTC copper-based ‘superfast fibre’) can meet such growing expectations of consumers – who want to browse, share, download, stream and upload without interruption on multiple devices. Full fibre users can download a two hour HD film in less than a minute or 100 songs in three seconds – no matter what time of day. FTTC is simply not sophisticated enough to handle this.

Yet the impact is not solely limited to home entertainment. The rise of online streaming will serve as the driver of technological developments in many industries, not least our digital economy. Advertisers will take advantage of personalised interaction of major live streaming events. New players will challenge the dominance of Netflix and Amazon Prime with fresh takes on advertising video on demand (AVOD) and subscription video on demand (SVOD) business models.

The upcoming Web 2.0 and 3.0 revolutions are also poised to adopt full fibre networks as part of the ‘sharing economy’ phenomenon, along with cloud computing, Internet of Things, and machine-to-machine computing. The real world – the day-to-day physical world – is now being forced to keep pace with virtual world innovation.

So, has the plug already been pulled on our beloved traditional broadcast TV? The most watched UK broadcast exceeded 20m viewers every year between 1970 and 1996 except one. Since then, only five out of the last 22 years have reached this benchmark, and four of those were either the Olympics or the World Cup. Meanwhile, the amount of time spent watching broadcast television on TV sets fell by 16% between 2012 and 2017, down to 3 hours 23 minutes per day, while 16-34 year olds now watch YouTube for an hour a day on average, Ofcom also found. Traditional TV has adapted successfully in the past to changing landscapes and new challenges, but it faces an almighty task to reverse engineer the future on this occasion.

The UK entertainment industry is undergoing seismic, fundamental changes with the growth of online streaming content consumption and shifting modern viewing habits. It is therefore only a matter of time before online streaming dethrones traditional broadcast television as the UK’s preferred entertainment hub.