High Definition Television: It’s a must have, but is it also a must see?

From bargain brand HD Ready 780p sets, to top of the range Full HD 1080p models, Britain’s love affair with high definition flat screen LCD/LED television sets is plain to see in every high street electronics store, where the old and rather chunky cathode ray sets are but a distant memory. Owning an HD television set, however, does not necessarily mean that you can watch any HD channels, unless it happens to come with built in Freeview HD reception as standard. In most cases it also requires you to invest in a Freeview or Freesat HD box, or upgrade to a Virgin or Sky+ HD box for those in pay-tv homes.

As the ability to watch HD channels therefore requires considerable expense and effort, one might expect those who have acquired the technology to make a point of watching the HD variants of any channels where they are available. With the largest HD channel offering of any UK television platform, one might also expect this to be particularly true for those with access to HD channels on Sky. In fact, with a growing number of HD channels, Sky decided to instigate an HD channel swap for its Sky+ HD subscribers, whereby for most, but not all channels with HD simulcasts, the SD and HD variants swapped places on the Sky EPG from the 1st of February 2011 – the most notable exception to this swap being the main terrestrial channels.

As it happens few HD channels are explicitly reported by BARB, with most channels that have HD variants simply reporting the combined SD and HD viewing figures. For a few channels, however, the HD simulcast figure is also reported separately, with ITV2 being a good example of a channel where HD viewing is reported, and which was also part of the HD channel swap on Sky.

If Sky+ HD subscribers were generally making a significant effort to watch ITV2 HD rather than ITV2 SD before the EPG swap, then we would expect the impact on ITV2 HD’s Share of viewing on the Sky platform to be relatively small. As can be seen in Figure 1 below, however, the impact of the EPG swap on ITV2 HD’s Share of viewing was dramatic.

Figure 1: Structural Break Analysis of ITV2 HD’s Daily Individuals Share Time Series on the Sky Platform 2 months before versus 2 months after the SKY EPG HD Channel Swap on 01/02/2011.

Structural Break Analysis

Source FEHMI/BARB

There was a clear and statistically highly significant structural break in ITV2 HD’s daily Individuals Share time series at the time of the HD channel swap on 01/02/2011, with ITV2 HD’s Share of viewing on the Sky platform rising by 288%.

This confirms that the vast majority of Sky platform viewers who had access to ITV2 HD still chose to watch the SD variant. Why would they do this? The most likely explanation is that before the HD channel swap ITV2 HD was near the bottom of the Entertainment section of the Sky EPG at no. 225 (it subsequently moved to 226 and has just moved to 207 as part of the latest Sky EPG reshuffle), making it much more cumbersome for Sky+ HD subscribers to access than ITV2 SD at no. 118. Even the option of accessing ITV2 HD through the HD genre section does not seem to have made much of a difference. Following the HD channel swap, however, the situation was reversed, with Sky + HD subscribers effectively accessing the HD variant of ITV2 by default, and this is also reflected in how, as Sky+ HD take-up has risen since Feb-2011, so too has ITV2 HD’s Share of viewing relative to ITV2 SD, as can be seen in Figure 2 below.

Figure 2: HD to SD Channel Viewing Ratio on the Sky Platform for ITV2, BBC1, ITV1 and CH4 (Feb-2011 to May-2012)

HD to SD Channel Viewing Ratio

Source FEHMI/BARB

Since the HD channel swap in Feb-2011, the ratio of HD to SD viewing for ITV2 on the Sky platform has grown steadily, rising from 25% in Feb-2011 to between 40% and 45% in the last few months. In sharp contrast, the HD to SD viewing ratio for BBC1, ITV1 and CH4, which were excluded from the channel swap and whose HD simulcast channels remain much further down the Entertainment section than the SD variants for Sky+ HD subscribers, the HD to SD viewing ratio has remained relatively flat at between 10% and 13% over the last 16 months.

Apart from the fact that EPG positioning does matter, perhaps the most pertinent fact to take from this is that many people are unlikely to take full advantage of a new technology (even if they have paid for it) unless it is made very easy for them to access. Many Smart TV’s are still waiting to be connected to the internet, and even when people have paid for an HD subscription on Sky, they only appear to take full advantage of this when the HD channels become the default choice on the EPG.

A hefty price tag of £299 notwithstanding, the fact that the first lot of YouView boxes to hit stores later this month will not include wi-fi should therefore also be food for thought, as it will make it that much more difficult for customers to connect their boxes to the internet if they do not happen to have a wired internet connection in the same room as their television. On the other hand, prices will inevitably fall, and there can be little doubt that built in wi-fi will soon be included as standard. The ability to access catch-up content directly through the main YouView EPG is also likely to prove very appealing to consumers, not to mention the fact that the considerable resources and content libraries of the main terrestrial broadcasters are behind the venture.

In the end, just like with high definition television, it is likely to be a combination of content quality and ease of access that will drive the take-up of connected television services, and once people have started to actively use a new service it is much harder for them to give it up.

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