New technologies are bringing new revenue streams but also boosting competition
Los Angeles, CA (PRWEB) April 22, 2013
Consumers are watching more TV than ever, spurring producers to compete for their attention and bring in revenue. Technological advances are garnering audience attention and making it more convenient to watch TV. IBISWorld estimates that the Television Production industry's revenue will increase at an average annual rate of 1.6% in the five years to 2013 to $36.4 billion. In 2013, revenue is expected to grow 0.5%, driven by rebounding advertising expenditure and disposable income. IBISWorld industry analyst Agata Kaczanowska says new technologies, such as Hulu and other ad-supported websites, are allowing TV producers to establish new revenue streams, but are also boosting the amount of competition within the industry. While it is easier to introduce TV shows to audiences through these websites, there are more shows available for consumers to choose from. Therefore, the introduction of internet TV and the recent increase of available channels have also dramatically increased competition within the industry. As a result, TV production has become more specialized, and companies have evolved niche markets to stimulate audience loyalty. For example, producers of crime shows have hired crime specialists to work on several shows at once, keeping costs of individual productions lower. Competition has also encouraged TV producers to invest in more advanced camera equipment that requires less training, making them less costly to use.
The top players in the Television Production industry are The Walt Disney Company, Viacom Inc., NBCUniversal, Time Warner Inc. and News Corporation. Market share has increased during the past five years as TV production studios expanded in the past five years. Also, some studios owned by a single company, such as Disney, were combined under the network umbrella to cut production costs. The market share concentration of the major players is expected to continue to increase as investors increase their funding during the economic recovery. Also, major studios are expected to invest in successful local studios in order to expand their TV production operations, especially since the industry performed well throughout the recession. This consolidation is also expected to occur as a result of increased competition due to the drastic increase in the number of broadcasted TV channels, continues Kaczanowska. Market share concentration is expected to increase further due to merger activity as the industry moves to a mature life cycle phase.
As a result of decreased TV production costs and increased downstream advertising revenue, profit is expected to rise to about 17.7% of revenue from 16.4% in 2008. Higher quality content is generating more viewer interest, which has enabled production companies to charge more for licensing. In light of higher profit margins, industry employment has increased at an annualized rate of 2.3% to total 87,811 workers during the five years to 2013. There is additional potential for profit expansion as new platforms and production methods are further developed. With the growth of new TV platforms and their relative convenience, IBISWorld projects that the Television Production industry's revenue will continue on an upward trend. In addition, technological changes will continue to limit the number of new enterprises, as TV production companies continue merging to cut costs and remain competitive. For more information, visit IBISWorld’s Television Production in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry produce television programming that is then licensed or sold to broadcast or cable networks, which are not included in this industry. Movie production is also excluded from this industry, with the exception of made-for-TV movie production.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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