Linear TV is still a key source of revenue and profits for broadcasters despite the rise of video-on-demand (VOD) services. This was one of the key topics of  Innovation Day conference.

The Ministry of Industry and Trade (MIT) will continue to support the free-to-air digital terrestrial broadcasting (DTT) platform beyond 2030. Miloš Mastník, general director of Czech Radiocommunications (CRA), said this at Innovation Day conference. The future of DTT to be decided next year at the WRC 2023 conference in Geneva, which will give a hint as to whether DTT broadcasters will be able to use their existing frequency spectrum. CRA CEO Mastnik is confident that DTT broadcasting has a future beyond 2030. This is due to the current economic development, which will create a society-wide interest in maintaining DTT due to its free availability.

DTT broadcasting is still the most widespread form of TV signal reception in the Czech Republic. It is used by 54% of Czech households, and the penetration of DTT platforms has been relatively stable over time. The second strongest is IPTV reception, which has grown to 26% over the last years, on the other hand, the share of households using satellite broadcasting is decreasing (to 17.5%). In the second quarter of this year, the share of cable broadcasting increased to 13% (see chart below for more).

According to the CEO, Czech Radiokomunikace wants to further develop free-to-air DTT, but at the same time it is also seeking to develop other platforms such as HbbTV (currently 1.3 million TVs connected to HbbTV are registered) and OTT. "We are working on a paid content project and discussing the establishment of a national platform," Miloš Mastník outlined the possibilities of developing paid content in DTT broadcasting.  However, discussions are only at the beginning, he said. Alongside this, the CRAs also have hopes for 5G broadcasting, which they have been testing since this spring and which is expected to bring benefits for TV broadcasting on mobile devices. The 5G testing is expected to expand to even more transmitters. The CRA also want to focus on the development of DAB+ digital radio broadcasting.

According to CRA's director of regulatory affairs, Marcel Prochazka, linear TV broadcasting is a key source of revenue for broadcasters from a commercial perspective. Video-on-demand services (VOD, Netflix and others) are negatively affected by rising consumer prices, with VOD growth stalling in some Western markets, he said. This is also why some providers are trying to build advertising sales into their models to make the service cheaper for subscribers. "We are seeing an increase in AVOD services that are supported by advertising. They're being talked about by Disney or Netflix, who are also considering their own linear free-to-air channels that will be ad-supported, which is similar to the kind of TV we know today," Procházka said. In addition, he said the financial results show that revenues and even operating margins from linear TV broadcasting are still growing, while operating margins for internet VOD services are also negative.