Total TV Viewing Trends (2010 – 2013)

TTV_TrendsAnnual BARB measured television viewing levels in the UK have fallen significantly for the first time since the advent of the new BARB panel in January 2010. Having fluctuated at just over 240 minutes a day during the three year period from 2010 to 2012 inclusive, average daily total television viewing (i.e. both live and timeshifted combined) for Individuals 4+ fell to 231.8 minutes in 2013 (down 8.8 minutes = 3.7%). As one would expect, the decline was even more pronounced when looking at live viewing only, with average daily live television viewing falling from 216.4 minutes in 2012 to 205.6 minutes in 2013 (down 10.8 minutes = 5.0%), having previously only dropped by around 1.9% per annum from 2010 to 2012.

Is this the beginning of the end for traditional ‘linear’ television? Are we inevitably moving to a world of small screens and personalised schedules where people getting together to watch a live television broadcast on the main living room TV screen is reserved for major sporting events and talent/game shows? While any significant decline in BARB measured TV viewing levels is a cause for concern, it certainly isn’t time to hit the panic button just yet. At an average of 232 minutes per day BARB measured TV viewing levels remain high, and are still comfortably above the 225 minutes per day at which the old BARB panel peaked back in 2009. While few would disagree that the increasing use of second screen devices (most notably tablets) to watch both catch-up and live television will have contributed to the decline in BARB measured TV viewing levels, as viewing on such devices is currently not included in the BARB data, the good summer weather in 2013 (not the mention the absence of mass audience events like London 2012) as well as the growing optimism about the economy (with more people able to afford nights out and foreign holidays) will also have played a role. Nevertheless, as I noted in a previous research note back in November 2012: “Whether we see a significant decline in measured total TV viewing levels (i.e. live and timeshifted combined) in the coming years will, rather ironically, largely depend on BARB’s ability to capture TV viewing on non-TV devices”. The good news is that BARB has been making significant progress towards measuring and reporting viewing on such devices, and while timescales can be rather elastic the current target is to start reporting TV viewing on desktops/laptops and tablets by the summer of 2014.

Sceptics, however, would still point out that while this might help mitigate the decline of BARB measured total TV viewing levels, it would do nothing to arrest the decline in the levels of live TV viewing. In fact, viewing on laptops and tablets is even more likely to be timeshifted catch-up viewing, though one can also watch live on such devices. They would also be able to point to the fact that as the take-up of PVR and VOD enabled devices has proliferated, the proportion of BARB measured total TV viewing that is live (as opposed to catch-up) has fallen consistently from 92.9% in 2010 to 88.7% in 2013. With up to 80% of adverts being skipped/fast-forwarded in timeshifted viewing streams, there is a risk that if such a decline were to continue unabated, then advertisers would lose confidence in TV’s ability to deliver mass audience ratings. Rather than continue chasing a dwindling supply of TV based Commercial Impacts and putting up with the associated rise in CPTs, they would eventually allocate more of their advertising budgets to other forms of advertising, spelling disaster for those commercial broadcasters that are too reliant on TV advertising revenues. That this is something which the TV industry is taking seriously, can also be said to be reflected in ITV’s increasing shift towards a more subscription based business model, most notably in its recent deal with Sky, whereby the new channel ITV Encore will be exclusive to Sky combined with the wider availability of ITV’s channels and programmes on all of Sky’s platforms including Sky Go, Sky Store and NOW TV.

Being cautious and diversifying one’s income stream, on the other hand, is simply good business practice, and there will always be those who watch very little live television once they have access to robust and convenient timeshifting technologies. What really matters, however, is that the hard empirical evidence to date suggests that there is a limit to how much TV viewing the average UK Individual is prepared to timeshift. The best way to appreciate this is to look at the live TV viewing levels on a mature platform where timeshifting is an integral part of the viewing experience. Sky+ fits the bill perfectly, having been one of the UK’s first PVR platforms, and with the latest generation of Sky+ boxes also incorporating internet connectivity and the associated access to VOD. In 2010 82.9% of total TV viewing (i.e. live and timeshifted combined) on the Sky+ platform was live and this did fall quite sharply to 80.8% in 2011. Over the 3 year period from 2011 to 2013, however, the proportion of live viewing on the Sky+ platform remained stable, holding at 80.8% of Sky+ total TV viewing in 2012 and only dropping marginally to 80.1% in 2013. This stability in the proportion of live viewing on the Sky+ platform over the last 3 years is particularly pertinent, as it coincides with a period of increasing internet connectivity for the platform, with even more VOD content and the ability of connected Sky+ users to catch-up on missed shows whether they remembered to record them or not.

The moral of the story is that live TV viewing is likely to continue to dominate even in an environment where everyone has ready access to a variety of PVR and VOD enabled devices, and while the way we are watching television is changing, our fundamental need for a shared live viewing experience in front of the main living room television set has remained the same. As I have pointed out on many occasions during my career as a broadcast media consultant, the empirical evidence does not support the perennial predictions of the demise of television.

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Posted in Ad-Skipping, Advertising Revenue, Adverts, BARB, Catch-Up TV, Death of Television, fast-forward, ITV, Live TV, PVR, Sky, Sky Platform, Sky Plus, Tablets, Television, Timeshifted TV, Timeshifting, Total TV, TV, Viewing, VOD | Leave a comment

EPG Prominence Back in the Spotlight

EPGThe long awaited communications strategy paper (published by the DCMS at the end of July) has reconfirmed the government’s support for the abolition of PSB retransmission fees, which was also the topic of my previous research note. Another topic of interest, however, is the government’s commitment to ensuring ‘that the PSBs retain prominence on EPGs by updating the existing regime to reflect technological developments and to make it flexible to adapt to future changes’ with the cost of not doing so (evaluated in the accompanying impact assessment) being put at a £198m ‘loss in UK and European originated and independent content investment’. 

This has put the issue of EPG prominence back in the spotlight, and is likely to be a point of some contention in the forthcoming consultation. The PSBs will naturally be in favour of any legislation securing their future prominence as EPGs evolve in an increasingly fragmented and on-demand viewing environment, while the (non-PSB) commercial broadcasters will understandably be against extending any legislation that could be seen as distorting the market in favour of their PSB rivals.

What is unlikely to be in doubt, however, is the growing consensus about the very significant value that can be attached to EPG prominence. My recent work for Ofcom on the audience impact of EPG prominence, which reviews the recent empirical evidence from 2010 to 2012, highlights how channel operators who don’t manage to secure prominent EPG slots for their channels almost always lose out. To emphasise this point, it is always good to look at a particularly interesting and recent example, and MTV’s move from the Music to a prominent slot in the Entertainment section of the Virgin Media EPG (from slot 311 to 134) on 31/05/2013 stands out, as MTV made a similar move on Sky in February 2011, the impact of which I’ve also covered in a previous research note.        

It is certainly the case that MTV’s Share of viewing on the Virgin Media platform increased by a dramatic 357% (from 0.085 to 0.387 Share points) in the 6-week before versus the 6-week period after its gain in EPG prominence, resulting in a statistically significant structural break in its daily Share time series at the time of the reshuffle. This is in stark contrast to MTV’s daily Share time series on Sky, which remained statistically stable over the period in question.

There is, however, a complicating factor to consider as MTV also moved from the L to the M+ package as part of its move into the Entertainment section of the Virgin Media EPG. With lower tier M+ subscribers being able to watch MTV for the first time, it is important to assess how much of MTV’s performance boost can be attributed to its gain in EPG prominence and how much to its increased availability. As it happens, Cartoon Network also recently (17/01/2013) moved from the L to the M+ package, but (crucially) without changing its EPG slot. The increase in Cartoon Network’s availability resulted in a doubling of its Virgin Media audience, suggesting that (as MTV’s audience more than quadrupled) at least two-thirds of MTV’s 357% performance boost on the Virgin Media platform can be attributed to its gain in EPG prominence.

For any remaining sceptics it is worth quickly mentioning one other recent example, namely that of Drama, UKTV’s latest channel, which launched in early July 2013 in slot 20 on Freeview and slot 291 (at the bottom of the Entertainment section) on Sky. Following a deal with PBS, however, Drama managed to move to slot 166 on the Sky EPG within a few weeks of its launch. This gain in Sky EPG prominence coincided with a doubling of its Share of viewing on the Sky platform, while its performance on Freeview (where it remained in slot 20) remained statistically stable.   

The underlying moral of the story (and forgive me for stating the obvious) is that whatever the item you are selling, be it a new line of perfume/clothing, a TV channel or a piece of VOD content, being prominently displayed in the shop-front will produce results.

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Posted in Content, DCMS, Drama, EPG, EPG Prominence, EPG Reshuffle, EPG Viewing Impact, Freeview, Impact Assessment, MTV, PBS, PSB, Retransmission Fees, Sky, Sky Platform, Television, TV, UKTV, Viewing, Virgin Media, VOD | Leave a comment

The Retransmission Fees Debate: Terrestrials vs. Sky

Satellite_DishesThe on-going row over retransmission fees (also often referred to as carriage fees) between Sky and the terrestrial PSBs (public service broadcasters) began when former BBC director general Mark Thompson argued that Sky should start paying for carrying PSB channels in his MacTaggart lecture in August 2010. By October the following year all of the remaining PSB broadcasters had come out in support of a retransmission fees review, with the whole issue being given an added sense of urgency by a BBC commissioned report suggesting that, if anything, retransmission fees were likely to soar rather than decline in the coming years. With budget cuts looming, and the BBC, ITV, Channel 4 and Channel 5 paying Sky annual fees of £9.9m, £8.1m, £5.0m and £1.4m respectively for carrying their channel portfolios, it is hardly surprising that this was fast becoming a major issue.

In March 2012, however, Sky made the unexpected announcement that it was cutting the BBC’s carriage fees by 40% from July 2012, and would reduce them by another 27% from 2014, with the other PSB broadcasters also receiving major carriage fee reductions. One might have expected this to result in a significant softening of the opposing views, but it soon became apparent that the terrestrials were determined to push through a no-fees scenario at the very least, with Adam Crozier (ITV’s chief executive) and John Tate (BBC director of policy and strategy) both welcoming the Sky carriage fee reductions but making it very clear that they did not go far enough. Since then the debate has intensified with Culture minister Ed Vaizey coming out in favour of the terrestrials at the Oxford Media Convention in January 2013, calling on Sky to stop charging the BBC, ITV, Channel 4 and Channel 5 retransmission fees or face potential government intervention, though he was also quick to point out that the government would not rush into “a regulatory solution” and he believed that there was “no reason the market shouldn’t be able to work out a fair and equitable solution as things stand.”

Needless to say, no such equitable solution has yet materialised, though there has been a lot of sabre rattling by both sides in the last few months. Sky has launched a vigorous defence of its position insisting that the fees it charges the terrestrials are “platform contribution charges” to cover the cost of investing in and running the Sky platform rather than “retransmission fees”, and are thus no different from the utility bills or rent that the terrestrial broadcasters have to pay as part of their normal operating costs. Sky also makes the point that as the terrestrial channel portfolios are free-to-air on the Sky platform, whereby viewers with lapsed subscriptions (or those taking its non-subscription ‘Freesat from Sky’ service) can still access these channels, they aren’t entitled to a share of its pay-tv revenues. The terrestrials, on the other hand, argue that (free-to-air or not) their channel portfolios are an integral part of Sky’s offering and account for such a large proportion of viewing on the Sky platform that many subscribers would simply choose to leave the platform if they could no longer access the terrestrial channels through their Sky boxes and EPGs. As Sky benefits significantly from carrying the terrestrial channels, it is only fair, so the argument goes, that they should pay the terrestrials rather than the other way round, with a zero carriage cost approach being the very least that should be on offer. It is also often pointed out that internationally, including in the US, it is the platform operators who pay the major networks a retransmission fee and not vice versa. The terrestrials also make the point that they are much more likely to use the money they would save (or even earn) to fund domestic productions, although Sky would argue that it too has invested heavily in UK originated content in recent years.

So, what is one to make of these polarised positions and what is the final outcome likely to be? Regulatory measures aside, much will of course depend on the clout each side has, and with this in mind it is interesting to note that despite Sky’s relatively recent concessions the terrestrials (most notably the BBC) have remained bullish in their calls for retransmission fees to be scrapped altogether, with this position often being presented as the bare minimum they would find acceptable. Is this confidence justified? Looking at the performance of the 5 main terrestrial PSB channels (BBC1, BBC2, ITV, Channel 4 and Channel 5) on the Sky platform since 2003, one would certainly have to say that it is.

The combined Individuals 4+ Share of the 5 main terrestrial PSB Channels on the Sky platform grew consistently year-on-year from 36.7 in 2003 to 43.5 in 2010, an increase of 6.8 Share points (up 18.5%). The growing dominance of the terrestrial PSBs on the Sky platform over the 2003 to 2010 period is even more apparent when we include the viewing to their spin-off channels (i.e. BBC3, ITV2, E4, 5*, BBC4, etc.), with the combined Individuals 4+ Sky platform Share of the main PSB’s and their spin-off channels (referred to from here on as the terrestrial PSB channel portfolios) rising from 44.2 in 2003 to 56.4 in 2010, an increase of 12.2 Share points (up 27.6%).

This was of course a time when the terrestrial PSBs were under great pressure, with the accelerating pace of the digital switchover threatening to rapidly erode their dominant Share of the UK television market, as ever more viewers switched from an analogue terrestrial environment (where the 5 main terrestrial PSBs were the only available channels) to a digital multichannel one, where the choice ran from a few dozen to hundreds of channels. Their strategy was to fight back by launching more digital spin-off channels and commissioning more compelling and engaging content, designed to help win back viewers in an environment of ever increasing choice. The strategy paid off and largely mitigated the negative impact of the digital switchover on their channel portfolios across the UK television market as a whole, and in an already fragmented environment like the Sky platform actually resulted in the substantial growth in Share over the 2003 to 2010 period noted above.

Faced with this growing dominance of the main PSBs and their free-to-air spin-off channels on the Sky platform, it was only a matter of time before Sky fought back with a strategy designed to drive viewers back to its pay-tv channel services. On the 1st of February 2011 it launched Sky Atlantic as part of a major Sky EPG reshuffle that was specifically designed to put pay-tv channels in more prominent EPG slots, including Sky’s recently acquired Virgin Media channels of which Living (re-branded as Sky Living) was moved into a slot on the first page of the Sky EPG. This was followed in June 2011 by the announcement it would increase spending on original UK television programming to £600m a year over the next three years – an increase of more than 50%. Unsurprisingly, 2011 therefore also marked the first year that the Share of the terrestrial PSB channel portfolios actually fell (by 0.5%, down 0.3 Share points to 56.1) on the Sky platform, after having grown consistently at a CAGR of 3.5% since 2003. There was a further decline in Share in 2012 (down 0.6 Share points to 55.5, a fall of 1.1%), despite the fact that the BBC would have benefitted significantly from the London Olympics, though a significant part of that gain would have come at the expense of the other PSBs. Looking at Jan-to-May 2013, however, there is clear evidence that this recent downward trend in the Share of the terrestrial PSB channel portfolios on the Sky platform is petering out, with the Jan-to-May 2013 Share of 55.0 only being 0.2% lower than the Jan-to-May 2012 Share of 55.1.

Despite making some modest inroads, it would therefore be true to say that Sky has been unable to dislodge the terrestrial PSBs from their dominant position on the Sky platform, with their channel portfolios currently still accounting for well over half (55%) of Sky platform viewing. With the government also coming out in support of retransmission fees for the terrestrial PSBs being scrapped, one would have to give them the edge in this row eventually being settled in their favour, though one should also never rule Sky out when it comes to standing their ground. Whatever the outcome, the underlying drive by both Sky and the terrestrials to retain their market positions by investing in innovative new content and technologies will continue to benefit consumers, with the UK television market remaining one of the most innovative and advanced in the world.

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Posted in BBC1, BBC2, carriage fees, Channel 4, Channel 5, Content, Digital Switchover, EPG, EPG Prominence, EPG Reshuffle, ITV, London Olympics, PSB, PSB Content, Retransmission Fees, Sky, Sky Platform, Spin-off Channels, Television, Terrestrial PSB Channels, TV, TV Scheduling, Viewing | Leave a comment

Ad-Skipping Drama: House versus Downton

Ad-skippingIn my last research note I compared the levels of live versus timeshifted viewing for medical drama House, going out on Sky1, and period drama Downton Abbey, going out on ITV1 (now of course rebranded to just ITV). With a later weekday slot, a more niche audience and a pay-tv broadcast (where PVR/DVR penetration is significantly higher), one would certainly have expected House to have a much lower proportion of live viewers than Downton, with its earlier Sunday slot, broader demographic appeal and free-to-air broadcast. Nevertheless, with Downton averaging a live audience level of 75%, the fact that on average only 25% of the consolidated audience of the premier UK showings of the final season of House was live, did come as a surprise.

As a much higher proportion of adverts are skipped in timeshifted viewing streams, the obvious follow-on question is what impact this is likely to have on ad-break viewing levels, and one can certainly get a good idea by analysing the minute-by-minute live versus timeshifted audience of an episode from each of the drama series in question.This is also a rather topical issue with Fox and other major US broadcasters currently embroiled in a legal battle with Dish Network over its ‘Hopper’ DVR service, which, rather than just giving viewers the usual ability to skip adverts by fast-forwarding them, actually has a dedicated ‘AutoHop’ ad-skipping feature.

Starting with House, and focusing on the UK premier showing of the final episode (Thursday, 24/05/2012, 22:00-22:56) on Sky1, which at 37% got the highest proportion of live viewers for the series, we find a stark contrast between the viewing levels of ad-break minutes in the live versus timeshifted viewing streams. It is true that the 3 centre ad-breaks are marked by clear downturns in both the live and timeshifted viewing streams, but whereas the downturns in the live viewing stream are small, with only around 6% of viewers switching channel (or putting the kettle on, etc., where BARB panel members are diligent enough to unregister their presence for the short time they’re away from the television), around 83% of viewers fast-forward over the ad-breaks in the timeshifted viewing stream. Overall, with over two-thirds of viewing being timeshifted (and it must be remembered that this was even higher for the other first-run episodes) this means that at best the average ad-break minute in the premier showings of House got significantly less than half the viewers (only 44%) of the average programme minute.

It is a similar story for Downton Abbey, where the 5 centre ad-breaks of the series 3 finale (Sunday, 04/11/2012, 21:02 – 22:29) on ITV are marked by clear downturns in both the live and time-shifted viewing streams. As one would expect, the downturns in the live viewing stream are small, with only around 4% of viewers switching channel or leaving the room during the ad-breaks, but this rises to around 75% of viewers skipping the ad-breaks in the timeshifted viewing stream. The main difference with House, however, is that a much higher proportion of the Downton audience watched live, with the overall impact being that the average Downton Abbey ad-break minute still managed to get over three-quarters (i.e. 79%) of the average Downton Abbey programme minute audience.

So, does this mean that the traditional TV spot advertising model is under threat with millions of pounds in potential advertising revenue being lost as viewers make increasing use of timeshifting technologies to skip over the adverts? While it is good to err on the side of caution, and many broadcasters have indeed been aiming to diversify their income streams and reduce their reliance of spot advertising, the TV advertising market has remained strong despite the economic slowdown, and it is likely that, despite all the challenges and stiff competition from other media, television will continue to deliver the high levels of exposure that advertisers desire and find difficult to obtain from any other source. There is a reason why so many online-only businesses choose to advertise on television!

For a start, as discussed in one of my previous notes, all the evidence to date suggests that we are not likely to move much beyond the 20% to 25% mark when it comes to the proportion of our total TV viewing that we choose to timeshift over the next 10 years. As we saw with House, this can of course be much higher for specific programmes, though it must be kept in mind that some of our timeshifted viewing will be in addition to, rather than a substitute for, our live viewing, thus partially mitigating any associated loss in advertising revenues. It must also be kept in mind that a decline in the overall volume of commercial impacts does not necessarily imply a reduction in total TV advertising revenues. It can be argued that, like with any other commodity, depending on how reactive prices are to changes in the quantity being supplied, it is possible that a reduction in the total volume of commercial impacts could actually result in a proportionally higher increase in price (cost per thousand), thus potentially resulting in an increase, rather than a decrease, in total TV advertising revenues. Indeed, a relatively recent study commissioned by Ofcom suggests that this might actually be the case (see report), and although this has proved somewhat controversial (see supplementary report), most experts would at least agree that the TV advertising market has proven itself to be resilient during both economically and technologically challenging times.

The true economic impact of ad-skipping is likely to be more subtle. Sky for example, with its primary reliance on subscription revenues can readily afford to schedule a valuable first-run showing of a key asset like House in a slot that is unlikely to optimise its live audience levels. As long as plenty of people watch the show, whether live or timeshifted, Sky benefits from the exposure this gives to its pay-tv platform, and in the event House did very well in terms of its consolidated audience figures, with the vast majority choosing to timeshift their viewing. When it comes to a free-to-air broadcaster/channel, however, with a much heavier reliance on spot advertising revenues, effective scheduling and promotion (including social media) to optimise the live viewing levels of any key first-run assets is likely to become much more important. As the high levels of ad-skipping in our House case study demonstrate, getting it wrong could prove to be a rather costly mistake to make for any broadcaster relying on advertising rather than subscription revenues as their primary source of income.

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Posted in Ad-Skipping, Advertising Revenue, Adverts, AutoHop, BARB, Dish Network, Downton Abbey, Drama, DVR, fast-forward, Fox, Future TV, Hopper DVR, House, ITV, Live TV, Ofcom, PVR, Sky, Social Media, Television, Timeshifted TV, Timeshifting, TV, TV Scheduling, Viewing | Leave a comment

House versus Downton: Timeshifting Drama

The ease with which viewers can now timeshift their television viewing has resulted in live viewing levels in the UK dropping from 98.2 % of total consolidated (i.e. live + timeshifted combined) BARB measured TV viewing in 2006 to just under 90% in 2012. This is, however, an average and is clearly going to vary significantly depending on the type of content, with a much higher proportion of the audience tending to watch live when it comes to news and sports than is usually the case for documentaries and dramas. Even for high-end television dramas, however, there is likely to be a significant variation in the extent to which viewers choose to watch live rather than timeshifted, and to get a better idea of the likely ranges involved, a comparative analysis of medical drama House and period drama Downton Abbey provides some interesting insights.

Even within a given genre there are many factors that are likely to influence a given programme’s live versus timeshifted audience, including scheduling, whether it is a first run or a repeat and on which channel/platform it is being broadcast. To achieve consistent results it is therefore best to limit our House versus Donwton Abbey case study to first run UK transmissions only, and to look at the most recent runs of each series. Season 8 of House (which was also the final season) went out on Thursdays in the 22:00-23:00 slot on Sky1 only 3 days after its US premier on Fox, with the first 8 episodes going out between 06/10/2011 and 01/12/2011, and the remaining 14 episodes going out between 23/02/2012 and 24/05/2012 following the mid-season break. To even come close to a comparable number of episodes over a similar timeframe for Downton Abbey we therefore need to look at series 2 and 3 as well as the 2011 Christmas special combined. Series 2 (18/09/2011 to 06/11/2011) and series 3 (16/09/2012 to 04/11/2012) with 8 episodes each both went out on Sundays in the 21:00-22:30 slot on ITV1, with the 2011 Christmas special going out in the 21:00-23:00 slot. Both titles also did extremely well for their broadcasting channels, with House averaging a consolidated Individuals 4+ audience of 654 thousand (2.5 times higher than the 22:00-23:00 Sky1 slot average) and Downton Abbey averaging  11.8 million (2.6 times higher than the ITV1 22:00-22:30) slot average).

Downton Abbey has certainly proved to be a resounding mass audience success for ITV1, and its premier showings now constitute an ‘event’ that many of its loyal fans will make an effort to watch live so that they can be part of the immediate conversation/experience. This is undoubtedly also helped by its very effective scheduling, and of an average Individuals 4+ consolidated audience of 11.8 million an impressive 75%, 8.9 million viewers, watched live. Without the ‘event’ appeal of Downton Abbey and a later slot, one would certainly expect the first run showings of the final season of House to have a significantly lower proportion of the consolidated average audience watching live. That being said, the Thursday night (22:00-23:00) slot on Sky1 would generally still be considered a reasonably effective placement by digital multichannel standards, and House does have a loyal fan base, who one might expect to make a reasonable effort to catch the live showings.

It may therefore come as a surprise to many readers that of an average Individuals 4+ consolidated audience of 654 thousand only 25%, 164 thousand viewers, watched House live. Looking at individual transmissions there does however appear to be a moderate upward trend, whereby the proportion of live viewers grew as the series came to an end, with the final ever episode of House managing to attract the highest proportion of live viewers at 37%. This does suggest that House fans may have felt more of a need to watch the show live as it was coming to its final conclusion, though it must also be noted that the rather erratic nature of the live viewing proportions time-series for Season 8 of House (with significant fluctuations of between 16% and 37% across the entire run) makes this at best a tentative hypothesis. By contrast, with the exception of the Christmas special, where the proportion of live viewers fell to 66%, there was very little variation in the proportion of live viewers across both the 2nd and 3rd series of Downton Abbey, with the proportion of live viewers remaining remarkably stable at between 73% and 79%, testimony to just how strong the desire to be part of a live ‘event’ can be. Watching it on catch-up isn’t quite the same.

That being said, the fact that so few of House’s UK viewers chose to watch the show live is a clear indication of just how dramatic the timeshifted versus live viewing range can be, and this is therefore a warning sign to broadcasters (particularly those relying heavily on spot advertising revenues) that it is important for them to raise the ‘event’ status of their leading shows to not only maximise their consolidated audiences, but to also ensure that the proportion of live viewers to these key assets remains consistently high. The problem with a low proportion of live viewers is of course the fact that a very high proportion of adverts are skipped in timeshifted viewing streams, and the dramatic impact this can have is something I will be discussing in my next research note.

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Posted in Ad-Skipping, Advertising Revenue, Catch-Up TV, Downton Abbey, Drama, House, ITV, Live TV, Sky, Television, Timeshifted TV, Timeshifting, TV, TV Scheduling, Viewing | Leave a comment

Predicting Future TV Viewing Patterns

The rapid evolution and proliferation of screen and internet based technologies has left many in the television industry feeling under siege. I have lost count of the number of media executives who tell me that they hardly ever watch live television anymore, and that surely everyone else must be doing the same. Then there’s the ‘digerati’, who have been predicting the demise of traditional ‘linear’ television since the turn of the millennium, if not before. The latest buzz is now around ‘Connected’ devices, bringing everything that the internet has to offer to our ‘Smart’ TV sets and second screens. Is the tipping point nigh? Are we finally witnessing the demise of traditional ‘linear’ television as we know it?

To begin with, talking about ‘linear’ television is starting to become somewhat of a misnomer. What is currently being measured by BARB (Broadcasters’ Audience Research Board) in the UK is live TV set based viewing as well as any timeshifted (catch-up) viewing within 7 days of the original live transmission through any TV or TV connected device (be it recorded or a via an on-demand service). As a result, a significant proportion (around 10% in 2012) of the viewing being measured and reported is only ‘linear’ in the sense that it is being watched within 7 days of the original live transmission. It is also very telling that although viewing (live or catch-up) through PCs, laptops, tablets and smartphones isn’t currently being captured by BARB, average television viewing levels in the UK have nevertheless remained at a record high of just over 240 minutes per person per day over the last three years.

While cynics may point suspiciously to the fact that these record viewing levels coincided with the introduction of a new BARB panel in January 2010, it is also the case that new panel is in all probability likely to be more accurate than the old, having been designed from the outset to measure TV viewing in a converging digital environment. The inevitable conclusion is that the new technologies and devices have so far acted as more of a compliment to than a substitute for our TV set based viewing, with ‘linear’ TV schedules still largely dictating our viewing habits whether we watch live or timeshifted within the measured 7 day catch-up window. The digital switchover has also meant that we now all have access to a much greater range of channels and associated content than ever before.

While all this is rather positive, it is also important to consider whether television viewing levels have now peaked and are likely to decline in the future. To begin with, the UK’s digital switchover is now complete, and at 240 minutes per person per day we are, on average, already spending 25% of our waking hours (assuming we average 8 hours sleep a day) in front of the television watching live or timeshifted TV content, and it is worth keeping in mind that this does not include such well-established activities as using the TV to play video games and watch DVDs or VOD/recorded content that doesn’t qualify as catch-up. If BARB succeeds in its current endeavour to measure and add the time we spend watching catch-up through PCs, laptops and possibly even tablets and smartphones to the television viewing total, then there may be scope for more growth. BARB is also considering an extension of the measured catch-up window from 7 to 28 days, which could push viewing levels up even further. On the other hand, there is also likely to be more downward pressure on television viewing overall, as the opportunities to watch TV content outside the catch-up window (even if it is eventually extended to 29 days), as well as VOD films and material from broadcasters’ archives, continues to grow, and we are already seeing the impact of this for younger demographics, where BARB measured TV viewing levels have begun to decline in recent years. Whether we see a significant decline in measured total TV viewing levels (i.e. live and timeshifted combined) in the coming years will therefore, rather ironically, largely depend on BARB’s ability to capture TV viewing on non-TV devices.

While the future direction of aggregated TV viewing levels is still in doubt, there is much less uncertainty about what is likely to happen to live television viewing levels in the coming years. It is a fact that we are now much more likely to timeshift our TV viewing, and this has begun to encroach on the amount of live television that we watch on a daily basis, which has declined by nearly 4% (from 224.9 to 216.6 minutes per day) over the last 3 years. It is therefore the ability to easily catch-up on shows that we have missed, or to watch them at a more convenient time (not to mention the ability to pause live TV) that has had the most significant impact on our television viewing habits in recent years. As around 80% of adverts are skipped in timeshifted viewing streams, this has also been a significant source of concern for broadcasters, like ITV, that rely on spot based TV advertising for the bulk of their broadcasting revenues. It is therefore no surprise that a core part of ITV chief executive Adam Crozier’s five year plan is to move away from traditional spot advertising and generate revenue from other sources.

At the moment, of course, live TV viewing levels, while falling, still remain high, but with the proportion of our BARB measured viewing that is timeshifted rising steadily from just under 2% in 2006 to just over 10% in 2012, it is important to consider where this trend might lead. Extrapolating from the existing trend suggests that by 2017 around 17.5% of our viewing will be timeshifted, rising to just below 25% by 2022. But simply extrapolating from an existing trend doesn’t really tell us where this is all likely to end. Will we inevitably end up in a world where the bulk of our viewing is no longer live? Many would believe so, but there is also some rather compelling evidence to suggest that our desire/need to watch live TV is actually much more deeply engrained than might at first appear to be the case.

It is certainly true that as we gain access to simple and effective timeshifting technologies, we do choose to watch less live TV, and it is the growth in the number of individuals who have access to this technology that is driving the growth in timeshifted viewing at the expense of live TV consumption. Once we have gained access to such technology there does, however, appear to be an upper limit to how much we are willing to substitute live for timeshifted viewing time. The original paradigm changing timeshifting technology was the PVR/DVR (i.e. Sky+, Freeview+, etc.), and BARB has been capturing timeshifted viewing through such devices since 2006. More importantly, the number of Individuals living in PVR homes has risen dramatically from around 3 million in 2006 to over 38 million in 2012. The proportion of timeshifted viewing in PVR homes, however, has remained remarkably stable, fluctuating at around 15% over the last 7 years, and while there has been some indication of a moderate upward trend in recent years (possibly as a result of further improvements to the technology), the best-fit-trend model (under current technological conditions) suggests that it is likely to level off, with the proportion of timeshifted viewing growing to around 17.5% in 2017, but only rising to 18.5% by 2022.

One must, of course, be very cautious when using such projections as the impact of future technological innovations is difficult to anticipate. Nevertheless, even if we try to factor in further improvements in timeshifting and VOD technologies, there is currently no indication from any of the empirically based projections that we are likely to move much beyond the 20% to 25% mark when it comes to the proportion of our TV viewing that we choose to timeshift over the next 10 years.

There will, of course, always be those who choose to timeshift most of their viewing, and on average younger viewers tend to timeshift more than older ones, but across the UK population as a whole there is currently still a strong demand for live viewing, and there also appears to be a limit to the extent to which we want to create our own on-demand schedules. Major sports, entertainment and news events are, of course, best watched live, and will continue to be so in the future. However, even putting aside such ‘best watched live’ content, it would seem that very often we just want to be entertained without putting too much thought into our viewing choices, and live viewing is still the simplest way to do that. It is also true to say that in many ways television viewing remains a communal activity that we like to discuss and share as it is happening. There is clearly something special about being part of the immediate conversation/buzz that is created by a live broadcast, and it is therefore perhaps no surprise that according to Twitter’s own statistics, 40% of all tweets during prime-time relate to TV shows.

To conclude, if broadcasters can continue to use the new screen and internet based technologies (including social media) to their advantage, and engage viewers with a broad range of high quality programmes, then there is every reason to believe that despite all the threats and challenges, the TV industry is likely to be on a stable footing for the foreseeable future.

If you would like to receive the associated research notes to Dr Farid El-Husseini’s blog posts please email him directly on:

Posted in Ad-Skipping, Advertising Revenue, DVR, Freeview Plus, Future TV, Internet TV, ITV, Live TV, PVR, Sky Plus, Smart Phones, Smart TV, Social Media, Tablets, Television, Timeshifted TV, Timeshifting, TV, Twitter, Viewing, VOD | Leave a comment

From MTV to Sky Arts: The Long Term Value of EPG Prominence

Sky’s recent appeal against DMOL’s proposed Freeview EPG reshuffle, citing the likely negative impact on Sky News, has again brought the value of EPG prominence under the spotlight. Perhaps even more pertinent is the fact that DMOL’s proposal does not actually change the relative position of the News channels within the genre rankings on the Freeview EPG, but simply changes their LCNs (logical channel numbers) to facilitate the future launch of new channels in the General Entertainment (which is overflowing), HD and Children’s genre sections. In effect, Sky is therefore not appealing against an immediate loss of EPG prominence (such as would have been the case for the Shopping channels, for example, if DMOL had succeeded in moving them out of General Entertainment into a dedicated Shopping genre section) but against a likely future loss of Freeview EPG prominence as new channels launch in the genre sections ahead of Sky News in the coming months and years. Continue reading

Posted in Content, DMOL, EPG, EPG Prominence, EPG Reshuffle, EPG Viewing Impact, Freeview, LCN, Local TV, MTV, PSB, PSB Content, Sky, Sky Arts, Television, TV, Viewing, Virgin Media | Leave a comment

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. Continue reading

Posted in HD, High Definition, Television, TV, Viewing | Leave a comment