Forecasting the Audience Impact of Sky’s Proposed EPG Reshuffle

Sky_Q_EPGThe announcement by Sky early last month that it was planning a radical overhaul of the increasingly complex Sky EPG, with a reshuffle target date of March 2018 after an appropriate consultation and adjustment period, will undoubtedly have set alarm bells ringing in the boardrooms and research departments of all the major broadcasters. As made clear in my research note from earlier this year, EPG prominence still matters and can have a very significant impact on channel performance, and there can be no doubt that the currently proposed reshuffle is potentially the most radical in the history of the Sky EPG, literally involving hundreds of channels changing position on the list. So, what do we know about the changes being proposed by Sky so far, and what impact is this likely to have on the performance levels of the affected channels? Nothing has, of course, been finalized yet, with the initial eight-week consultation period not due to conclude until early October, but from what has been made public about Sky’s proposals in a number of recent Broadcast articles, four core EPG reshuffle elements have emerged.

Creating a dedicated group for swapped HD/SD simulcasts in the 800s: Back in Feb-2011, to promote the growing number of HD channels, Sky implemented an HD channel swap for those customers with relevant HD boxes and subscriptions, whereby HD simulcast channels, having generally launched later and so in less prominent EPG slots than their SD counterparts, automatically swapped places (i.e. channel numbers) with their more prominently placed SD variants. As outlined in one of my research notes from the time, the resulting impact on HD channel viewing was dramatic. Due to issues with their regional opt-outs (such as local news and adverts) not being broadcast in HD, the main terrestrial PSB (public service broadcaster) channels didn’t participate in the HD/SD channel number swap, though considerable progress towards doing so has been made in the intervening years and it is likely that where HD regional variants now exist they will be swapped as part of the forthcoming reshuffle. However, the growing number of HD/SD simulcast channels (excluding regional PSB variants, there are currently around 90 channels for which both an HD and SD variant is listed on the Sky EPG) has also resulted in considerable cluttering of the Sky EPG across all the main channel genre groups, with many channels effectively being listed twice (i.e. both an HD and SD variant) within a given genre section. Sky’s proposed solution would appear to be grouping together all the swapped SD simulcast variants and putting them in their own group in the 800s (similar in the way to which regional variants of the PSBs are available in the 900s), thus both decluttering and freeing up a considerable amount of space in all the main channel genre sections, most notably in Entertainment, Sports and Movies. While it isn’t clear from the information that has been made public, presumably it is the HD simulcast channels that would be relegated to the 800s where subscribers do not have the appropriate HD channel access. As for the likely viewing impact, not having the same channel effectively listed twice within any given genre group, but in a separate group at the back of the channel list (where they are less likely to attract passing viewers), will probably result in some losses for the affected channels. On the other hand, given the clear need for streamlining Sky’s current EPG, this does (notwithstanding any potential technical issues with how this would be implemented across different subscription packages with varying HD channel access) constitute a logical extension of the HD/SD channel swap that has already been in place for over 6 years.

Creating a dedicated time-shifted (‘+1’) group in the 700s: There are currently 75 time-shifted channels (virtually all ‘+1’ with the occasionally ‘+2’) listed on the Sky EPG across the main channel genre groups, with 45 (60%) of these being in Entertainment. Over the last 12-months they accounted for around 8% of BARB measured Individuals 4+ consolidated (i.e. Live + 7-days catch-up) viewing on the Sky platform, though their viewing contribution to certain channel portfolios will be significantly higher than the platform average. Sky’s currently proposed plan would appear to be for all the time-shifted channels to be grouped together and moved to a dedicated time-shifted genre in the 700s, with the time-shifted channels also being reordered in their new genre to reflect the relative placement of their primary counterparts. Broadcasters would retain control of the vacated slots into which they could either move up one of their primary channels, or alternatively sell the slot to a rival broadcaster. Unsurprisingly, this proposed move has proved particularly controversial with the affected broadcasters. To begin with, any reordering of the time-shifted channels (whether collectively moved to a dedicated genre group or not) would be closely scrutinized by broadcasters, and those who feel they have unfairly lost EPG prominence could well mount a challenge under the FRND (fair, reasonable and non-discriminatory treatment) requirement of the Ofcom EPG Code. There is also likely to be very serious concern about the negative viewing impact of moving all the time-shifted channels into a group close to the back of the channel list. Past experience suggests that while some of the less well placed channels may benefit from being in a dedicated group where they can be more closely associated with key players, for the currently better placed channels the viewing impact is much more likely to be negative. When Sky moved the Lifestyle channels out of Entertainment and into their own dedicated genre group in Feb-2006, this resulted in a statistically significant 20% drop in viewing for the group as a whole, and with further declines over the years Sky eventually moved the remaining Lifestyle channel back into Entertainment in August 2014. On top of this, those time-shifted channels that are currently listed next to their primary counterparts (around a third of the total) will almost certainly suffer additional losses, with numerous past examples showing how (due to the strong promotional impact of the primary) splitting a time-shifted channel from its primary counterpart results in significant additional audience losses for the time-shifted channel above and beyond what can be attributed to an any associated loss in EPG prominence. Some commentators though, may well argue that time-shifted channels are becoming redundant in an age where access to on-demand and catch-up services is fast becoming ubiquitous, though as a counter one can just as easily point out that even on the Sky platform 80% of viewing remains live.

Merging the Documentaries with the Entertainment channels: With a significant amount of space being freed up in the Entertainment section, with a combined total of around 75 swapped HD/SD simulcast and time-shifted channels potentially being moved out of Entertainment under the aforementioned proposals, Sky has additionally proposed to merge Documentaries (currently starting at 520) with Entertainment. There are currently 34 channels listed in the Documentaries section of the Sky EPG, but as 10 of these are time-shifted and a further 7 are swapped HD/SD simulcasts, only 17 channels from the Documentaries section will actually need to be accommodated in Entertainment. As discussed in two of my previous research notes (see: note 1 and note 2) MTV’s move from Music into Entertainment on both the Sky and then Virgin Media EPGs clearly highlights how a move from a more specialized genre section (even when very prominently placed there) into the Entertainment section can result in very significant viewing benefits that persist over time. That being said, this does very much depend on whether or not one can secure a sufficiently prominent slot within Entertainment. When Lifestyle was merged with Entertainment on the Sky EPG in August 2014, this did not result in a universal performance boost for all the channels involved, with some channels making significant gains, while others lost out. Indeed, as a group the Lifestyle channels suffered a performance drop of around 6% on the Sky platform in the 12 months following the reshuffle, while in contrast the same channels on Virgin Media (where they remained in a separate Lifestyle section) were up by around 12% as a group. There is also likely to be some concern among the operators of the News, Sports, Music and Movies channels that will be leapfrogged by the Documentaries channels. There are certainly historical precedents to suggest that being leapfrogged by a competing channel group can have a significant adverse viewing impact, though this will also depend on how closely the two channel groups are likely to be competing for the same viewers.

Moving up the Kids channels to just behind Entertainment: The final element of Sky’s reshuffle proposal would be to move the Kids channels (currently starting at 601) up the EPG as a group to sit just behind Entertainment, and in anticipation of having a tidied up Entertainment genre this would have the Kids genre potentially starting at 250 under the current proposal. One would certainly expect the Kids channels to welcome this move, while the channels being leapfrogged are likely to be concerned, particularly those targeting younger viewers. Much will depend on the extent to which younger viewers are likely to navigate directly to a specific channel genre section rather than scrolling through the entire channel list. It is also worth mentioning that the current ordering of the Kids channels on the Sky EPG has been a bone of contention with the BBC, who argue that CBBC and CBeebies (as PSB channels) should be at the top of their genre list, something that is contested by the commercial Kids channels who argue that this would be unfairly detrimental to their performance. It remains to be seen to what extent the currently proposed reshuffle will be used as an opportunity to address any such outstanding contentious issues.

While we have highlighted some of the key areas of concern for the affected broadcasters, it is also important to point out that the proposed Sky EPG reshuffle offers an unprecedented opportunity for broadcasters to not only reorganise/optimise the positioning of their channel portfolios, but to also potentially acquire some of the more prominent vacated Sky EPG slots. While for some this will help mitigate any reshuffle induced losses, others could well find that they have an opportunity to boost the overall EPG prominence (and hence performance) of their portfolios as a whole. The devil is in the detail, and what is clear is that a significant amount of well-informed research and analysis will be needed to predict all the likely future outcomes.

If you would like to receive the associated research notes to Dr Farid El-Husseini’s blog posts please email him directly on: farid.el-husseini@feh-mi.com.

This entry was posted in +1 Channels, BARB, Channel List, EPG, EPG Prominence, EPG Reshuffle, EPG Viewing Impact, Forecasting, HD, HD/SD Channel Swap, HD/SD Simulcast Channels, High Definition, Ofcom, PSB, Sky, Sky Platform, Television, Time-Shifted Channels, TV, Viewing, Virgin Media. Bookmark the permalink.

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