The next 12 months will see the broadcast sector addressing new business models for distribution and advertising in a bid to retain and attract new audiences. This is one of the key conclusions to be drawn in a new report which says that the transforming communications and entertainment sector is creating a challenging new environment for traditional broadcasters. In order to remain competitive, digital TV players will need to utilize effective technological solutions to aide in multi-platform distribution and value-add services.

From personal media players (PMPs), to TV sets, to mobile phones, people will access media content on a variety of different devices over a multitude of communications networks, as such, broadcasters are faced with strong pressure to adapt to multi-platform entertainment provision. With only so many hours in a day, retaining and attracting consumers requires a thorough understanding of evolving consumption habits.

In order to tackle continued threats of piracy, declining advertising effectiveness, the entrance of non-traditional competitors and audience fragmentation, broadcasters are diversifying their revenue streams. The UK provides a prime example of diversification models with broadcasters obtaining significant revenue from non-traditional broadcast sources including TV shopping, interactive services, pay-per-view and program sales.

Furthermore, multi-service operators (MSOs) are using bundled services (primarily telephony and Internet service provision) to bolster both their product portfolios and secure additional revenue. In the long run, broadcasters who employ diversified revenue models are able to hedge against some of the risk inherent in securing funding from just one or two sources.

Advertising has been a steadfast revenue generator for the broadcast sector, however, as consumption habits transform and consumers utilize multi-platform channels as well as on-demand and time-shifted viewing, traditional revenue generation models are loosing their effectiveness to bring returns. Broadcasters therefore will need to look to a variety of diversified revenue streams to bolster income.

Further Reading: 2008 Trends to Watch: Media and broadcasting technology