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Battle for UK TV industry to 'intensify' as execs predict online video revenue to quadruple by 2020

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By The Drum Team | Editorial

March 22, 2012 | 3 min read

The UK television industry expects both pay and advertising revenues from online video services to quadruple by 2020, according to new research.

The findings come from Red Bee Media, which surveyed executives from across the UK television industry on their predictions for business models and revenue streams in 2020.

More than three quarters (78%) are positive about the financial outlook for the industry, expecting growth both in traditional TV revenues and new revenue streams such as online services that capitalise on subscription payments and new commercial opportunities.

However this growth will come at the price of increased competition. Around two thirds of respondents (64%) believe that the growing influence of digital gatekeepers such as Apple, Google, Amazon and Facebook is the most important challenge facing their company through to 2020.

Online video aggregators such as YouTube are predicted to benefit the most from growing advertising revenue, with 67% of respondents expecting aggregators to have the greatest success at growing their share of revenue.

The importance of new platforms and IP-enabled devices will also be a key factor. Industry respondents expect nearly a quarter (23%) of adults to watch video through games consoles by 2020, up from 12% in 2010.

And three quarters (72%) of respondents believe that competition for premium content will intensify dramatically by 2020, as more companies seek to acquire rights.

Bill Patrizio, CEO of Red Bee Media, said: "From talking to the industry, it’s clear that technology and internet businesses are fast becoming significant players. The question we need to ask ourselves is whether the innovations brought by these new entrants are going to sustain or disrupt our industry in the years to come. Will the internet be the industry’s friend or foe? And what role will regulatory bodies play in determining the impact and pace of change?

"If the last 10 years have seen the convergence of broadcasting with broadband, it’s likely that the remainder of the coming decade will see a collision and competition between business models driven by consumer demand and expectation and changing patterns of media consumption. Media companies will have to fight hard and innovate in a fast changing, technologically driven landscape if they are to make the most of this flourishing market."

More than half (57%) predict a major technology company such as Google, Apple or Samsung will acquire live rights to Premier League football.

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