In the case of Evestar, this of course means understanding how the reality TV industry works in reality (pardon the pun). However, in order to understand the reality TV sector, we will also need to know something about the broader TV industry in general. And that can be a little bit more intimidating...

 

Fortunately for you, The CIMA Hub has been rigorously analysing both the reality TV sector and the TV industry in general, and has gathered and interpreted some of the most important facts and figures for your convenience. With our full Industry Analysis, you can be confident going into the case study in February that you will have the most relevant information when it comes to company decision-making. We do not simply throw all the facts, figures and history at you and leave you to juggle all the info. Rather, we boil the industry down to the essentials, consider only the relevant trends and numbers, and give them to you in a way that you can use. So with all that in mind, let's introduce you to some of the interesting recent trends in the TV industry.

 

One of the first and most obvious questions is whether this industry is a growing one, or whether it's in decline. When we speak about the TV Industry broadly, to include all forms of television-show viewing, then the picture is a generally positive one. As you can see from the following graph, there has been a steady growth in global revenues in the TV industry in recent years.

 

 

The majority of that growth in percentage terms has come from subscription services. Subscription services include digital services such as Sky in the UK, for example, or the “cable” networks in the United States; but also new online platforms such as Netflix and Amazon Prime – so-called “over the top” (OTT) services. As we will discover further on (see full industry analysis for details), these OTT services are potentially of crucial importance from the perspective of reality TV production. As is clear from the graph below, Online TV revenues have been growing robustly in the same period, across a range of countries. Relatively speaking, both traditional broadcast TV (free-to-air and National broadcasters) and digital subscriptions like Sky and cable networks have seen much more modest growth.

 

 

Looking ahead, some of the more authoritative analysts predict that this general global growth in TV revenues is set to continue in the next 5 years. However, the nature and composition of that growth is likely to be different given the increasingly mainstream position of OTT. There are also some industry experts (see full analysis) predicting that the relationship between advertisers and traditional TV networks is about to change radically in the coming years, and that advertisers are increasingly redirecting their resources into online advertising. This could seriously jeopardise traditional TV broadcasting financially. Since reality TV is much more dependent upon contracts from traditional broadcasters, this is something that reality TV production companies may need to insulate themselves against in the coming years...

 

Let's consider the industry now from the point of view of consumers and customers. Of course from the perspective of Reality TV producers, there is a distinction between the two. The consumers of their products are members of the tv-watching public. The customers, on the other hand, are the tv networks who purchase their shows. They have to consider both stakeholders of course, and so we need to look at recent trends and developments among both groups.

 

We'll begin with consumers. Understanding the behaviour of consumers is of course crucial, since being able to anticipate their demands and demonstrate that a new show will satisfy those demands will make the reality TV producers' show much more attractive to the networks. So we need to try to answer two key questions – who is watching tv, and what have they been watching? There are many ways to categorise tv audiences, but one of the most common is by age. So let's take a look at recent tv viewing trends by age group. This first graph represents age groups' tv viewing averages for traditional, broadcast (sometimes called “linear” tv) television. As you can see, there has been a dramatic fall-off in viewing figures amongst the younger age groups, even over this relatively short five-year period...

This has been just a portion of what you will find in our full Industry Analysis video. You can access the full analysis here, either individually or as part of our Smarter Study Pack. We hope you have found this introductory survey of the TV industry helpful, and that you will take a look at some of our other resources for the Strategic Case Study in February. You can find our other free articles on the SCS here and here. And of course check out our various study packs and products here. We wish you the very best in your studies!

Don't forget to check out our other great free SCS February 2017 articles here and here for more great insights ahead of your exam.

 

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