Business Model Questions Linger As Broadcasters Shutter 3D Offerings in Favor of Multi-Screen Services

Posted by Joe Zaller
Jul 05 2013

Earlier this week the BBC announced that it will broadcast select matches from the Wimbledon Championships in 3D this year.  At that time, Kim Shillinglaw, Head of BBC 3D, said: “We’re delighted to provide live 3D coverage from the biggest matches of this year’s Wimbledon. Major UK sporting events are a big part of our trials with 3D content and this allows us to build on our work from previous Wimbledon Championships and the London 2012 Olympics.”

Now, Broadband TV News reports that the BBC is taking “a three-year holiday from the development of 3D programming with the corporation’s head of 3D admitting the UK public had not taken to the format.”

Broadband TV News quotes the BBC’s Shillinglaw saying “Watching 3D is quite a hassly experience in the home. You have got to find your glasses before switching on the TV. I think when people watch TV they concentrate in a different way. When people go to the cinema they go and are used to doing one thing – I think that’s one of the reasons that take up of 3DTV has been disappointing.”

Shillinglaw’s sentiments echo the statement made by ESPN last month and first reported by the Sports Video Group (SVG) that the leading US sports network was discontinuing its ESPN 3D service “due to limited viewer adoption of 3D services to the home.” ESPN went on to say that it plans on committing the resources currently assigned to 3D production to “other products and services that will better serve fans and affiliates,” specifically citing 4K (UHDTV) as an example.

At the time of the ESPN announcement, SVG said that the discontinuation of ESPN 3D raises serious questions regarding the future of 3D sports programming in the U.S. While Europe — especially the UK — has seen continued interest in live 3D sports, American consumers failed to adopt the format at a high rate.” The BBC’s announcement implies that UK consumer appetite for 3D is as lukewarm as it has been in North America, making it impractical for even a publicly funded broadcaster to continue with the format.

A remaining piece of the 3D puzzle is the 2014 FIFA World Cup, which will probably be the most watch global event of the year.  According to SVG, HBS (Host Broadcast Services), which will produce the world feed for the 2014 World Cup in Brazil, has yet to confirm whether the tournament will be produced in 3D.


Research Shows Commercial Importance of 3D Down, Multi-Screen Up

These announcements from BBC and ESPN are consistent with the findings of the Big Broadcast Survey (BBS), our annual study of the global broadcast industry.  In particular, the 2013 BBS Broadcast Industry Global Trend Index, reveals that multi-platform content delivery is once again the top industry trend for broadcast technology end-users worldwide, while 3D lags far behind in terms of its commercial importance to broadcast professionals.

Not only have research participants consistently told us that 3D lags other industry trends in terms of its commercial importance to their businesses, we’ve also found that 3D has become increasingly less important each year for the past several years.

For example, the chart bellows shows the chart below shows a comparison of the BBS Broadcast Industry Global Trend Index from 2012 and 2013.  It measures changes in how end-users ranked the commercial importance of industry trends on a year-over-year basis.


2013 BBS -- 2013 BBS Broadcast Industry Global Trend Index -- Red Box Around 3D (small)


Note that in this chart, 3D had the largest reported year-over-year percentage decline in commercial in both between 2012 and 2013.  This was also the case last year.

However, the above chart also demonstrates that while interest in 3D has waned, multi-platform content delivery is and continues to be the dominant trend in the broadcast industry, with more research participants citing it than any other trend as being most important commercially to their business.

The BBS’s plans for Wimbledon are further evidence of this.  The broadcaster said that it will make coverage of the tournament available on an increasing number of platforms, including ten live streams that will be available to PCs, mobiles, tablets and connected TVs.  The BBC will also offer three streams for “Red Button” for viewers on cable and satellite and Digital Terrestrial TV.


What about the business model?

Our research, as well as studies from many other firms, leaves no doubt that the popularity of multi-screen services in increasing.

However, it’s another matter to create a commercially successful business model in an environment where audiences are fragmenting, additional content preparation costs are required, and bandwidth providers charge steep fees for unicast delivery of video stream to consumers.

Delivering multi-screen services to consumers is a relatively straightforward process from a technical perspective. Monetizing content on multiple platforms, devices, and use cases is a different matter.

For example, in March 2013 Broadcasting and Cable magazine reported that one panelist at Next TV Conference said that multi-platform content monetization is still a ‘train wreck,’ although other did express “great optimism about the leaps technology will take in coming years.”

In our conversations with broadcasters, Devoncroft analysts have found that many broadcasters and media companies are indeed finding it a challenge to create a sustainable multi-screen business model with a margin profile similar to their traditional business.

The issue is that the shift to multi-platform has dramatically altered the economic model of the TV business. There are a number of reasons and examples why this is the case, but the end-result is that many broadcasters and media companies feel that in order to thrive in this new environment, they must radically change their cost structure.

The resulting decision these organizations will take will have significant implications for content owners, broadcasters, and technology vendors.

We’ll be addressing some of these in future posts on this website.
Some of the information in this article is based on select findings from the 2013 Big Broadcast Survey (BBS), a global study of broadcast industry trends, technology purchasing plans, and benchmarking of broadcast technology vendor brands. Nearly 10,000 broadcast professionals in 100+ countries took part in the 2013 BBS, making it the largest and most comprehensive market study ever conducted in the broadcast industry. The BBS is published annually by Devoncroft Partners.

Unless otherwise specified, all data in this article measures the responses of all non-vendor participants in the 2013 BBS, regardless of factors such as organization type, organization size, job title, purchasing and geographic location. Please be aware that responses of individual organization types or geographic locations may be very different. Granular analysis of these results is available as part of various paid-for reports based on the 2013 BBS data set. For more information about this report, please contact Devoncroft Partners



Related Content:

Broadband TV News: BBC puts 3D development on hold

BBC Press Release: BBC confirms 3D coverage plans for Wimbledon

Sports Video Group: ESPN To Discontinue ESPN 3D by Year’s End  

Broadcasting & Cable: Monetization Still a ‘Train Wreck,’ But Shows Signs of Clearing

The 2013 Big Broadcast Survey (BBS) – overview of available reports, including covered brands and product categories

Largest Ever Study of Broadcast Market Reveals Most Important Industry Trends for 2013

Tracking the Evolution of Broadcast Industry Trends 2012 – 2013

Analyzing Where Money is Being Spent in the Broadcast Industry – The 2013 BBS Broadcast Industry Global Project Index



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