APRIL 10 – TV companies will have to drastically adapt to the rapidly changing world of online entertainment if they are to survive, experts warn.
Broadcasters are already catching up with online gaming giants in the battle for young audiences’ attention and the advertising dollars that follow.
On the horizon looms the so-called ‘metaverse’ – a loose term for the growing ecosystem of interactive online worlds, games and 3D hangouts that already attract millions of users.
While older consumers are still attached to traditional TV, viewership for those under 35 has halved in a decade, according to Statista, and will decline rapidly as the metaverse grows.
“Young people have gone from passive TV viewers to active gamers, and they’ve moved from screens to smartphones,” said Frédéric Cavazza, co-founder of Sysk, a French company specializing in digital transformation.
“TV channels will die along with their audiences.”
“Part of the story”
To reach young people, broadcasters will have to compete with game platforms like Roblox, Fortnite and Minecraft – seen as precursors of the metaverse – which already occupy a dominant position.
According to media research firm Dubit, half of 9 to 12 year olds in the United States use Roblox at least once a week. They do everything from games to concerts to hanging out with friends.
The audience can be huge: 33 million people saw rapper Lil Nas X perform at Roblox in 2020, more than three times the number who saw him on TV this week at the Grammys.
Broadcasters must choose whether to stick with a shrinking market for traditional TV programming or start integrating their characters and brands into metaverse platforms, said Matthew Warneford, co-founder of Dubit.
“It means bringing people to a world, making them part of the story, playing with their friends — the same way Disneyland lets you and your friends be in their world with Mickey Mouse,” he explained.
TV companies have time to adapt, but they face a major challenge to accommodate the elderly who watch traditional shows, middle-aged people switching to streaming and young people who want interactive and social entertainment.
“If we want to remain relevant, we will have to position ourselves on all these applications,” says Kati Bremme, head of innovation at France Télévisions.
The national broadcaster is still in research mode, she said, playing with augmented and virtual reality to build immersive cultural and sports experiences.
However, the biggest challenge may be financial.
So far, TV companies have been protected from technological disruption as their ad revenues have remained largely unaffected, unlike other traditional media such as newspapers.
That could be changing “faster than people think,” Warneford said.
It used to be difficult to bring TV ads into the game world because they were created by individual companies “locking them up and capturing all the value,” he said.
But with the more open field of the metaverse, brands will have a lot more leeway to promote themselves and sell goods directly to users.
Indeed, fashion and luxury brands already make millions selling virtual clothing and accessories on Roblox, Fortnite and other platforms.
“If they want to reach young people, do companies still go to television or go where young people really are – in games and the metaverse?” — Studio ETX