ABSTRACT
The study sought to find out the audience perception of internet TV as an emerging technology in Nigeria. The study adopted quantitative data collection method which allowed for numeric analysis of data, structured questionnaires was used as Primary data collection tool and respondents were sampled from pay TV subscribers in Nigeria. Performance of internet TV firms is impacted by the high level of customer churn with a large number of subscribers having more than one pay TV decoder or either having a free to air decoder. The major game changer in the pay TV industry in Nigeria will be access to exclusive live sports content and news content. Technological improvements and new consumer trends of the late 20th and early 21st century have evolved rapidly; the television firms have passed through extensive transformation. Television (TV) is closely associated with digital exploits. Video content and viewing screens have become inseparable and today’s viewers have a lot of options about how they will view content; they just expect that they can get content anywhere, anytime and on any screen’. Thus, the division of content forms and viewership continues, while the types of devices used to view content diversify. Video has also become a social butterfly, attracting new audiences and revenue, and pollinating new platforms as it flies well beyond the living room. There has been an emergence of content outside the traditional pay TV systems. Consumers are now in control they want to dictate the kind of content they watch and on the type of devices they view it from.
The onslaught of pay TV cord cutting is being led by younger generation who are more knowledgeable on technology matters. The pay TV incumbents in Nigeria currently are not affected by the emergence of internet TV due to the slow and cost of internet acquisition but the disruption will definitely catch up with them and they will have to adapt by improving their content delivery especially sports and come up with internet- based applications or be rendered useless.
CHAPTER ONE INTRODUCTION
• Background of the Study
Technology is quickly revolutionizing our way of life while causing extensive disruptions across various industries. For instance, in the automobile industry, we have electric car technology changing the world’s perspective on the fuel powered cars while Uber on the other hand is disrupting the traditional taxi business as we used to know it. The technology revolution has since caught up with the broadcasting industry and leading to some amazing product innovation like online TV. Indeed, the audio visual industry globally has been undergoing a transition. Opinion among researchers and industry analysts is divided about the disruption taking place in the broadcast technology. Some contend that the TV industry is diminishing and is slowly being substituted by the Over the Top (OTT) industry while others believe that incumbent linear TV is revamping into internet dependent platform.
To understand the emerging end user adaptation as result of the disruptions and how end users are expected to experience these preceding changes, the study explored disruptive innovation and diffusion of innovation. To understand the significance of these developments, Porter’s Five Forces theory provided framework for analysis.In this respect, the study delved into the distinguishing factors of both the internet TV (the ability to watch audio visual device via the internet) and the linear TV (the traditional way of depending on antennae or dish to receive content) in Nigeria television sector. It highlighted the disruption caused by online services to the conventional television services, and the expected future developments in the audio visual industry with a zoom focus on the performance.
Online TV and the linear traditional pay TV are subscriptions dependant service, i.e. subscribers must pay to watch their content. In this case both are in competition for the same limited pocket share. The distinguishing factors in both is that for Linear TV infrastructure is needed to be able to transmit television signals either via satellite, terrestrial or internet protocol and also for their client to receive they must have a fixed television set with either antennae or dish. Compared to the flexibility offered by online TV in terms of device needed and at times wireless connection, (Berman et al. 2011).
• The Concept of Emerging Technologies
The emergence of new technological breakthroughs is persistent and taking place at an alarming rate while disrupting the normalcy. It is looked at in terms of potential monetary implications and ability to cause waves in the industry (Veletsianos, 2010). Disruptive technologies typically show increased rate of change in their capabilities in terms of price or use in comparison to other previous ways of doing things they provide distinctive innovations that push the rate at which things were being done before providing capacities that were not witnessed before. To make economic sense, an innovation must disorient existing firms that were providing the same services or goods by giving rise to superior quality products that the incumbents cannot be able to match.
One of the most impactful technologies in the world currently is the advent of mobile internet; this technology through innovation could have an impact on five billion people by creating a new crop of entrepreneurs .The Internet of Things (IOT) technology which is the ability of devices to communicate is able to connect a lot of devices globally. This would have profound impact on nearly all spheres of life as we know it currently in areas such as health, safety and interactions of the human race. The importance of emerging technologies is that they have the potential to change our day to day lives from how we live, work, interact with one another, transform businesses and drive countries gross domestic product, (Robertson et al, 2016).
• Online TV
Internet technology can be said to be one of the most profound invention of all times. The discovery and its subsequent application have revolutionized almost every facet of our lives as we know it today. In this regard, one of those realms that has been greatly impacted is the entertainment industry. The invention of internet technology among other things led to the emergence of online TV also referred to as OTT in this context. This development has created a disruption in the broadcasting industry whose players since inception relied upon traditional broadcasting technology like satellite and terrestrial services to deliver home entertainment.
However, while the online TV took root in the developed countries much earlier, the waves of change are finally reaching the shores of developing countries like Nigeria.
Consequently, Nigeria’s broadcasting industry has undergone number of tremendous changes since the invention of broadcasting technology was diffused to developing countries. Before the advent of online TV, we had the digital migration which involved moving terrestrial TV services from analogue to digital technology broadcasting (Muvaka, 2015). The migration process which caused quite an upheaval in the Nigeria’s broadcasting industry started way back in 1990s during 90’s during a United Nations International Telecommunications Conference (ITU). However, it was not until the year 2006 when the ITU made a resolution for member countries to migrate to digital transmission. This move is considered to be the greatest single technological leap in the history of television (Taylor, 2013).
In 2015, analogue signals in Nigeria were switched off and there was transition from a largely free-to-air TV into a pay-to-watch era. The migration had many implications for both the broadcasters and the customers alike.
Recently, there has been a lot of changes attributed to technological advancements and new consumer trends, the television industry has undergone great amount of changes. These new developments have resulted in the formation of online TV as a formidable force in the entertainment sector. Consumers have transitioned from limited choices to unlimited choice.
Currently, the available options for viewers are numerous, flexibility in programming watch what they want whenever they want, and the disruption has caused broadcasting incumbents enormous challenges. As a matter of fact, the inception of internet based content transmission and viewing service has caused waves in the industry therefore disrupting the normality in when compared to the old established incumbent traditionally established television industry.
In Nigeria currently, OTT market is at the introductory stage and it’s a relatively new product while in developed world it’s in growth phase globally. The statistic to measure the market share of OTT in Nigeria is fairly inaccurate at this stage. According to Sheffer (2015), market dominants, not in any particular order, are ShowMax, Youtube, Amazon Prime and Netflix. The shared main source of earnings in the pay television industry as a whole is subscriptions based but they do have other sources such advertisements which is dependent on the ratings they.
• Research Problem
The high level of innovation as scientists pursue breakthrough solutions to global problems has led to myriad of emerging technologies that are changing the way we do business and live our day to day life. These emerging technologies have disrupted industries and existing players are looking onto ways of surviving the revolution. In the realms of broadcasting technology, a lot has changed since the invention of satellite broadcasting technology as well internet technology. These changes have resulted to widespread disruptions within the television industry. In this respect, a number of studies have been done around entertainment and broadcasting technologies with first voices emanating from global researchers.
A study conducted by Macnamara (2010) foresaw the fall of Tv industry, he found out that in the TV industry there was no innovation going on in the industry and there was a “me too” kind of mentality as everyone was doing the same thing using the same business model for an extended period of time. Television industry just produced content and pushed it to consumers and they only got their revenue through advertisement. Berman et al. (2011) and Maclean’s (2013) foresaw disruption with the rate in which technology was advancing with portable devices coming up and the whole entertainment ecosystem would be changed by advent of portable devices.
A study conducted in Europe by Fontaine (2013) on television sectors and similar survey carried out in US by Waterman et al. (2012) showed the emergence of over the top as an industry disruptor. They concluded that traditional TV was on its death bed and OTT was driving the nails in the coffin, they concluded that the traditional pay TV needed to adapt or die. Baccane et al (2012) postulated that incumbent transmission of audio visual content .i.e. TV is being run down by the following new established internet based platforms that are able to transmit audio visual content, namely (1) peer-to-peer interaction for example social media sites, (2) OTT solutions on software and applications for example Netflix, ShowMax etc, and (3) video website platforms such as YouTube.
According to a study conducted by Digitalsmiths' (2015) incumbent broadcasters could be all together wiped out by internet based transmission sites which is capable of showing real time television and pre recorded television. To adapt incumbent broadcast television firms were advised to revamp their broadcast approaches and look for new ways to improve customer journey (Berman 2011) and to help tackle the onslaught being promoted by the over the top industry and for their own survival. Of the contrary opinion was Lima et al. (2015) who found out that the TV industry was ailing, instead he was of the idea that it was transforming. In support Perren (2013 and Baccarne et al., (2013) posits that incumbent could be looking into ways of changing their models by converging into platforms and that internet based transmission service will be a mix of old school television and the new emerging digital media. Without disregarding all these studies that look down upon the trajectory being taken by internet TV as an emerging industry, there is no contrary opinion that the OTT transmission trajectory was on ascending path and users are increasingly relying on online streaming as source of entertainment. The level of consumer control courtesy of OTT as compared to the incumbents offers a great degree of user experience endearing most of their user (Maclean, 2013).
Analysis of Netflix development and impact on television industry in Hong Kong found that customers were moving from traditional Pay-Tv to OTT and Pay TV companies were losing on subscription, (Chan et al., 2016). Study conducted by Ooyala in 2018 on the state of broadcast in the United States of America found that Netflix’s U.S. subscriber base has now passed that of cable TV a clear signal that consumer viewing tastes have changed in favor of OTT. Factors driving these trends were; ubiquitous consumer desire for content choice, convenience and lower costs, and the advancements in technology.
However, none of the studies looked into the audience perception of online TV on the performance of Pay-Tv service in Nigeria yet. This study therefore sought to determine the influence of online TV on the performance of internet TV firms in Nigeria, it was guided by the changes seen in the TV entertainment industry and result in the question what influence does online TV have on preference of pay TV industry?
• Research Objectives
The objectives of the study sought to:
• Determine the performance of internet TV Practioners in Nigeria
• Study the audience perception of online TV on performance of pay television practioners in Nigeria.
• Research Questions
• How is the performance of internet TV Practioners in Nigeria?
• What is the audience perception of online TV on performance of pay television practioners in Nigeria?
• Significance of the Study
From the findings, they will learn how to survive the onslaught brought about by internet TV. The study will also point out recommendations having examined the coping strategies being used by Pay-TV service providers. This will be a double sword as the Internet TV providers will be able to pick up ideas on how to respond to the coping mechanism by Pay-TV. Internet-TV operators may respond with operations strategies that ensure they remain productive and increase efficiency through designing demand-led products and services.
Regulatory authorities might find this study useful in making policy reforms and development of industry standards that promote quality and the provision of value for money to consumers as well as consumer protection from exploitation. Further, researchers wishing to extend studies on the operation of Internet TV and Pay-Tv in Nigeria might use this study as a reference point. The study will identify further areas of research that might be useful to future scholars.
• Scope of study
The study focused on investigating the practices and perception of internet television. The study was limited to the Nigerian audience who have access to internet television.
• Limitations of the Study
i. Biased respondents. Some respondents gave the researcher biased data and some gave wrong information. The researcher sorted out information at each session of collecting data to rule out the suspected wrong information.
ii. Un-cooperative respondents. Most respondents were not willing to have the questionnaire answered but the researcher kindly requested them to answer the rationale of the study.
iii. Financial constraints. There was problem of meeting all costs incurred since the researcher was student with no sponsor but had budgeted in advance to finance the process.
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Item Type: Project Material | Size: 57 pages | Chapters: 1-5
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