Television Networks Threatened with Extinction: Change or Die, Says Deloitte Report

Television Networks Threatened with Extinction: Change or Die, Says Deloitte Report

- Exploding Demand, New Formats and Devices Creates Challenges and Opportunities; Consumers to Get Variety of Innovative Products and Services -

NEW YORK, April 21 /PRNewswire/ -- The global broadcast television industry is undergoing fundamental, unstoppable change that is rendering the network model obsolete, says a new report by Deloitte's Technology, Media & Telecommunications (TMT) industry group.

The report, "Television Networks in the 21st Century: Critical Mass in a Fragmenting World," argues that the model of a few dominant network channels -- funded by advertising -- has long been disappearing and may soon be gone for good. However, these changes also create new opportunities -- for networks that can evolve into a multi-dimensional, highly adaptable, customer-focused model. They also are expected to result in a variety of innovative products and services for consumers.

"Today's consumers are seeking content across an expanding array of transmission media, channels, interactive platforms and devices," said Tony Kern, Deputy Managing Principal, U.S. TMT group. "As a result, consumers -- and their pocketbooks -- will be increasingly spread across a wider range of options. Audiences will splinter into many smaller pieces, even in countries that have undergone fragmentation for years. Networks will no longer attract mass audiences, and therefore they won't be able to charge premiums to advertisers. Their legacy business model will no longer be viable."

"However, there is also good news," said Kern. "Demand for content is exploding in all forms of media, and this creates significant opportunities. Cable subscription revenue has tripled since 1997, and DVD revenues have skyrocketed by a factor of 15. New mediums - such as Internet Protocol Television (IP TV) -- have the potential to drive revenues even higher."

The report predicts that successful television networks will adapt to this new world by minimizing the fragmentation of their audiences and generating income from entirely new activities. They will:

* Offer content and programming across a variety of media channels and formats. * Re-package and market content -- not just as products but also services. * Significantly extend the content's lifespan, by offering more digital content that can be quickly and easily packaged, and sold or rented across a wide range of media -- including physical packages such as DVD, VHS and memory cards and electronic downloads via wired and wireless networks.

Some of the future products and services that may be available to consumers include:

* On-demand content -- A warehouse of audio and video content for a wide range of uses, such as web-casts, radio airplay, mobile phone downloads, and Video-on-Demand. * Interactivity -- Participation, voting, purchasing, news and information, on-line games, questions and comment submission, and web- based chat. * Events -- Tie-in events such as the concerts based around the Pop Idol and American Idol series.

"These new products and services will enhance the television networks' relationships with consumers, while at the same time providing a reliable stream of subscription revenue and repeat business." concluded Kern.

To schedule a briefing or for more information on Deloitte's "Television Networks in the 21st Century: Critical Mass in a Fragmenting World" Report, please contact Laura E. Wilker of Deloitte Services LP at (212) 436-4697 or Evonne Lum of Ogilvy Public Relations at (212) 884-4026. A copy of the report is available at http://www.deloitte.com/research/tmt.

As used in this press release, the term "Deloitte" includes Deloitte & Touche USA LLP and its subsidiaries Deloitte & Touche LLP, Deloitte Consulting LLP and Deloitte Tax LLP.

About Deloitte's Technology, Media & Telecommunications (TMT) Group

The TMT Group is composed of service professionals who have a wealth of experience serving technology, media and telecommunications companies throughout the world in areas including cable, communications providers, computers and peripherals, entertainment, media and publishing, networking, semiconductors, software, wireless, and related industries. These specialists understand the challenges that these companies face throughout all stages of their business growth cycle and are committed to helping them succeed. Deloitte is a leader in providing strategic, financial and operational assistance to its technology, media and telecommunications clients

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in nearly 150 countries. With access to the deep intellectual capital of 120,000 people worldwide, Deloitte delivers services in four professional areas - audit, tax, consulting, and financial advisory services - and serves more than one-half of the world's largest companies, as well as large national enterprises, public institutions, locally important clients, and successful, fast-growing global growth companies. Services are not provided by the Deloitte Touche Tohmatsu Verein, and, for regulatory and other reasons, certain member firms do not provide services in all four professional areas.

As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other's acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names "Deloitte," "Deloitte & Touche," "Deloitte Touche Tohmatsu," or other related names.

Source: Deloitte

CONTACT: Laura E. Wilker of Deloitte Services LP, +1-212-436-4697, or lwilker@deloitte.com; or Evonne Lum of Ogilvy Public Relations, +1-212-884-4026, or evonne.lum@ogilvypr.com, for Deloitte Services LP

Web site: http://www.deloitte.com/us http://www.deloitte.com/research/tmt

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