Experts warn that TV companies must radically adapt to the rapidly evolving world of online entertainment if they are to survive.
The broadcasters are already catching up with the online gaming giants in the battle for the attention of young audiences and the resulting advertising money.
On the horizon is the so-called “Metaverse” – a loose term that encompasses the growing ecosystem of online interactive worlds, games and 3D venues that are already attracting millions of users.
While older consumers are still locked into traditional television, viewership among the under-35s has halved in a decade, according to Statista, and will fall precipitously as the metaverse evolves.
“Young people have gone from passive TV viewers to active gamers, and they’ve moved away from screens and towards smartphones,” said Frederic Cavazza, co-founder of Sysk, a French company specializing in digital transformation.
“TV stations will die with their audience.”
To reach young people, broadcasters will have to compete with gaming platforms like Roblox, Fortnite and Minecraft – thought to be precursors to the metaverse – which are already dominating.
According to media research firm Dubit, half of all 9- to 12-year-olds in the US use Roblox at least once a week — from playing games to going to concerts to hanging out with friends.
Audiences can be huge: 33 million people watched rapper Lil Nas X perform on Roblox in 2020 – more than three times the number who watched him on TV at the Grammys this week.
Broadcasters must decide whether to hold on to a shrinking market for traditional television programming or start bringing their characters and brands to Metaverse platforms, said Matthew Warneford, co-founder of Dubit.
“It means bringing people into a world, making them part of the story, playing with their friends — just like Disneyland allows you and your friends to be in their world with Mickey Mouse,” he said.
TV companies have time to adapt, but they face a major challenge in immediately catering to older people watching traditional shows, middle-aged people making the switch to streaming, and young people wanting interactive and social entertainment serve.
“If we want to stay relevant, we have to position ourselves across all these uses,” said Kati Bremme, head of innovation at France Televisions.
The national broadcaster is still in research mode, she said, playing with augmented and virtual reality to create immersive cultural and sporting experiences.
However, the biggest challenge is likely to be financial.
Until now, TV companies have been protected from technical disruptions because their advertising revenues have remained largely unaffected – unlike other traditional media such as newspapers.
That could change “faster than people think,” Warneford said.
It used to be difficult to get TV ads into the gaming world because they were made by individual companies “who locked them down and captured all the value,” he said.
But with the more open field of the metaverse, brands have many more opportunities to promote themselves and sell goods directly to users.
In fact, fashion and luxury brands are already making millions selling virtual clothing and accessories on Roblox, Fortnite and other platforms.
“If they want to reach young people, do companies go further on TV or do they go where young people actually are – in gaming and in the metaverse?”