Is Misclassification Really a Problem?

In the broadcast and media industry, it is becoming clear that the biggest impact can be made by a shift in mindset. The rapid evolution in broadcasting technology should be challenging traditional perceptions and classifications, compelling us to rethink how we define and approach different content delivery methods.

If you were to pop onto LinkedIn today, you'll find a myriad of articles comparing FAST services to traditional revenue streams. You'll see phrases like "Paid-TV still outperforms streaming" or "FAST beats linear in viewing wars," which further muddies the waters of classification. This is particularly confusing since many people, including myself, are paying for some form of streaming service, while FAST channels blend both linear and VOD elements. The distinctions between these formats are becoming increasingly blurred, complicating how we categorise and compare them. To truly re-classify broadcast, this distinction needs to be much clearer, but it can only happen if mindsets change and widespread implementation is agreed collectively and not in silos.

Why is Re-Classification Important?

The broadcast industry relies on data and news to guide future changes, meaning that misclassification can lead companies astray when reviewing and updating their aging technology stacks and operational models. Accurate classification and understanding of emerging trends are crucial to making informed decisions and avoiding costly missteps.

Many businesses within the world of broadcast box themselves into these two categories, "traditional broadcast" and "streaming". This split mindset forces media providers and industry professionals to manage each world separately, with resources allocated to new technologies while the legacy systems continue to support the long-standing user base. When faced with the cost and effort of upgrading old technology stacks, companies often revert to a "5-year plan" or similar short-term growth targets. These plans typically emphasize investment in the streaming world, such as new ad-tech and front-end solutions aimed at quick customer conversion, while relegating older systems to maintenance budgets or minimal investment.

The Future of Paid TV

How the industry understands classification could also be putting some services such as paid TV in trouble. Business Insider, for example, published an article stating that paid-TV services have lost 6.9% of their subscriptions. However, this data focuses solely on US cable services and does not include data from US streaming platforms like Peacock, Paramount+, NOW, and Disney+. Interestingly, the article only briefly addresses the "churn problem" facing streaming services, which is to reflect a broader churn-hopping trend. Often misunderstood and villainised, this trend is a missed opportunity for many platforms, who don't adjust their marketing budgets or UI improvements to simplify "win-back" customer journeys.

Many broadcasters and media providers might be swayed by this outlook and shift their investments towards streaming platforms, allowing for traditional platforms to stagnate until they eventually phase out. This strategy aims to capture or reinstate cord-cutters, treating streaming options as a short-term safety net to stem the flow of a diminishing user base. However, this approach can lead to end users feeling neglected, as projects focus on conversion and short-term revenue rather than long-term user engagement. It’s vital that the industry begins to address how this approach might affect the future of businesses.

The graph below, posted on LinkedIn as a snippet from a third-party research report, illustrates consumption types, not video platforms, as the question suggests. This misclassification can skew perceptions about the future of content consumption and strategies for reaching customers. A potentially dangerous classification mistake that could cost businesses. Linear TV, for instance, can encompass content delivered via cable contracts, monthly streaming platforms, or free-to-air/FAST channels. This misleading classification complicates understanding and decision-making in the industry, highlighting the need for clearer definitions and more accurate data interpretation.

In response to this graph, let's rephrase the question to: "what type of content do you watch three times a week on your TV set?" or "how do you access the content you want to watch on your TV set? This change could be the difference between the misclassification of a statement or a very interesting questionnaire on the topic of consumption types. In particular, the topic of linear TV is often the main culprit in misclassification, since it can be consumed across all platform types, creating confusion within the industry. When we reclassify, it's crucial for everyone to have a clearer understanding of how linear TV fits into the broader ecosystem of content delivery. This will help in making informed decisions and crafting effective strategies for the future. Making simple changes, like the one above, is a great way to start.

Conclusion

Now that we have identified the need for re-classification, and explored what that means, it’s about putting it into practice in the real world. Our broadcast businesses are relying on potentially misleading data day by day, and addressing this – although it will take time – is something that needs to happen.

In the next article, we will be exploring real life applications and examples of this classification issue. With the recent evidence and discussions surrounding paid TV revealing some concerns and issues for the future, it’s important now more than ever that classification is accurate and correctly serves the increasing consumer demand across the industry.