This book is about the transformation of the television industry, whose structure is being decisively affected by platformisation . This trend refers to the rise of the platform as the dominant infrastructural and/or economic model in media, electronic communications and information, communication and technology (ICT) sectors. The television industry is witnessing the breakdown of the traditional distribution monopoly, the proliferation of new modes of distribution , the integration of content and distribution infrastructure at the corporate level and the crystallization of the so-called ‘post-network ’ period (Lotz 2014; Strangelove 2015). These developments have created opportunities for innovative, over-the-top (OTT ) video services such as Netflix , Amazon and Hulu to enter the television industry and expand their activities along the value chain. These platforms have started to play an active role in the financing, production , aggregation and/or distribution of audiovisual content .
Walt Disney ’s announcement that it would end its distribution agreement with Netflix and launch its own streaming service in 2019 is symptomatic of the platform mania that is affecting the audiovisual industry, including television . Every value chain player wants to become a platform in order to become the main point of access for consumers in search of television and video programming. The launch of a direct-to-consumer model allows Disney to escape working with the powerful providers of pay-television services , with whom it has had to negotiate for carrying its channels . This change gives the Disney conglomerate direct access to behavioural data , which form the basis of the highly personalised experience and interactive user interface platforms have typically provided. Data are allegedly the new gold and provide fertile ground for innovative business models.
Disney ’s statement that it would launch a streaming subscription service exclusively for its sports network ESPN got remarkably less attention. In the context of this book, however, the launch of an ESPN -branded platform is likely to be much more revolutionary. ESPN has been commanding the highest retransmission fee—a payment it gets from pay-television operators in return for carrying its channel—of all television and cable networks in the United States . Although a standalone streaming service would certainly be attractive for cord cutters missing out on sports events, ESPN would put its substantial income from carriage fees at risk if it were to launch a full-service OTT platform, thereby entering into direct competition with pay-television operators . The latter would suffer seriously if their subscribers were to cancel premium services and switch to cheaper OTT platforms . The war of the platforms has begun.
Whereas in the past cable and satellite operators had the privilege of offering subscription -based access to television programming, the internet has broken the traditional television value chain. Every player has obtained the ability to secure distribution of its services and connect with the viewer directly. With all players seemingly evolving into a platform—intermediaries charging consumers for access to a television -like service—the marketplace becomes a place of uncertainty. The fairly linear value chain from production over aggregation to distribution and consumption is no more. At best, this shift results in more competition. At worst, the marketplace runs the risk of being overcrowded—a situation that might trigger consolidation and ownership integration. In any case, the market is populated by platform wannabes that need to build a business model around a set of crucial gatekeeper functions that help the platform to exercise control over the market . Today, numerous platforms are vying for leadership and control in the market , but only a few will dominate tomorrow. The rise of the platforms has received wide attention in popular press and trade magazines, but too often the focus is on the new kids in town. Upcoming Netflix Originals are widely discussed, as well as Apple ’s and Facebook ’s expected and announced move into original video programming. Television is dying, techno-utopians claim.
Change is happening extremely fast; the transformation of legacy media admittedly goes too slowly. The resilience and flexibility of traditional broadcasters and pay-television operators is often underestimated when the future of television is considered, though. While broadcasters see the decline of traditional viewing, particularly with young audiences, and the growth of digital streaming services , live television remains in good shape. Traditional creators and distributors of television programming have solid assets to keep them as firs...