Overview
This is the golden age of TV… but not for everyone. Pay TV is constantly looking over its shoulder as it loses subscribers. Over-the-top is everyone’s favorite buzzword, but most services are still in the red. Cable networks are vying to remain relevant in the looming age of skinny bundles. Content costs are ever-increasing even as the value of syndication is declining. Local TV has relied on local-interest topics, but that’s starting to fray. Ratings are not what they used to be. Advertisers still need scale platforms to advertise on, but they’re starting to look for alternatives to traditional outlets.
All is changing.
However, from an audience perspective, “TV” is still at its peak. Content has never been better. Access has never been easier. And in some cases, both content and access have never been more affordable.
Given these opposing forces and the surrounding industry dynamics, navigating the TV ecosystem (both the traditional and digital platforms) requires a deep understanding of audiences’ preferences and habits; a detailed familiarity with the industry value chain and accompanying economics; and a keen eye for evaluating financial return potential. L.E.K. Consulting has helped many clients successfully navigate this complex journey.
How we help
We are active in many aspects of the TV business, supporting clients within the following areas as they face significant challenges and ask crucial questions:
- Pay TV providers
- What is the future of the pay TV industry?
- What is the forecast of subs under varying strategies?
- What is must-have TV versus nice-to-have TV?
- How can we construct a better skinny bundle?
- How should we think about rights and alternative (e.g., OTT, O&O) distribution platforms?
- What are the economics of acquiring content?
- Channels/networks/content owners
- What are the go-forward economics under a range of scenarios and potential futures?
- How should we think about our programming wheel and what content to pursue?
- How can we best exploit our library and existing IP?
- How can we get consumers to engage digitally?
- What direct-to-consumer strategies should we consider?
- What is our best OTT play?
- How do we grow internationally?
- Local broadcasters
- Which set of stations should we target for acquisition?
- What is the future of retrans and reverse retrans, and what is the local TV financial outlook?
- How do advertisers perceive the future of local TV in their budget mix?
- How will local advertising evolve, and how do we get our fair share?
- Investors
- Which segments of the ecosystem are good investment opportunities?
- How will the ecosystem evolve, and where will the economics flow?
- What do we need to believe the investment will make, and how likely is that?
Examples of our work
L.E.K. has a long track record of supporting players in the TV industry and is one of the global leaders in the sector. Select examples include:
- Supported the launch of one of the most successful linear sports networks
- Supported the successful launch of major vMVPD offer
- Supported the successful launch of an OTT network, quickly reaching over 1 million paying subs globally
- Evaluated a variety of digital TV initiatives for traditional media players, and identified some that needed to be shut down, saving our clients hundreds of millions in losses
- Evaluated many different local markets, identifying the more lucrative targets for our clients to pursue in order to achieve better returns
- Developed a business plan for a cable network family to dramatically grow its consumer products business
- Supported buyers and sellers in successful rights negotiations
- Evaluated the economics of buying a major station group
- Developed a strategy for new targeted ad formats to improve CPMs
- Educated boards on the future of TV trends
- Developed a successful growth strategy for a leading aggregator of regional sports networks
