Although year-on-year schedule based UK television viewing, as measured by BARB’s consolidated (Live + 7-days catch-up) Total TV audience, has been in decline since 2012, it was beginning to show signs of levelling off with a very notable slowing in the downward trajectory between 2015 and 2016. However, now that the final figures for 2017 are in, there has been a renewed acceleration in the rate of decline. Between 2012 and 2015 the annual average Individuals 4+ Total TV audience fell steadily at around 3% per annum (from 9.59 million to 8.75 million), but only declined by 0.6% between 2015 and 2016 (to 8.70 million), to then accelerate again in 2017 with a notable drop of 3.6% (to 8.39 million). To put this in context, the annual Total TV viewing forecasts to 2020 that I generated back in early 2015, and which have so far been very much on the mark, predicted that for 2017 the Individuals 4+ Total TV audience was likely to fall somewhere between 8.46 and 8.87 million, so the actual 2017 audience (at 8.39 million) is only just under the lower end of the forecast range. While this continuing decline is therefore not unexpected, the fact that while for 2015 and 2016 the actual Total TV audience always fell in the middle of the forecast range and has now suddenly dropped to the lower end is certainly cause for concern, and an updated forecast (potentially including other forms of video consumption as well as schedule based TV) may well be warranted to reassess where we are headed.
To begin with it is worth noting that the Individuals 4+ consolidated Total TV audience in 2017 is still roughly at the same level it was back in the mid-noughties, though this is within the context of significant population growth, so if we look instead at Individuals 4+ Average Daily Minutes of consolidated TV viewing at 203 mins in 2017, down by 16% (38 mins) from 241 mins in 2012, we are currently watching less Live + 7-days catch-up TV than at any point in the last 20 years. Even if we were to include 8-28 days TV set based catch-up viewing (BARB measured since July 2013), this would only add about 2.5% (5 mins), and by BARB’s own Project Dovetail estimates, including non-TV screen based broadcaster app catch-up viewing (scheduled for March this year) is only likely to add a further 1.5% (3 mins), so we’d still not quite get back to the mid-noughties level of around 215 minutes per day. So, is it finally time to hit the panic button? Are the Death of Television predictions that have now been a perennial thorn in the side of our industry for at least the last decade finally coming true?
First some perspective, schedule based television viewing in the form of Live + 7-days catch-up is still a very dominant activity, with the average person (aged 4+ in the 95% of UK households that own a working television set) still spending nearly three and a half hours every day consuming traditional television. That being said, there is a growing dichotomy between the viewing habits of older and younger viewers. Since 2012 the Average Daily Minutes of Live + 7-days catch-up TV watched by Adults 55+ has hardly changed, which is in stark contrast to what has happened with younger viewers, where the declines in schedule based TV viewing levels over the last 5 years have not only been significant, but are also more pronounced the younger the age-group.
So, what is happening to all this lost schedule based TV viewing among younger audiences? As noted above, we know that 8-28 days TV set based catch-up viewing only accounts for a relatively small proportion of this lost viewing (and could in any case be legitimately included as part of more traditional schedule based TV), so perhaps younger viewers are simply spending a lot less time in front of television screens? Paradoxically, all the available evidence suggests that this is not the case. We have always used our television sets for activities other than watching traditional schedule based television, from old-school video cassette players to DVDs, games consoles, using our TVs to listen to the radio and more recently access of a whole range VOD apps and services from the BBC iPlayer to Netflix. But while BARB has been capturing Live + 7-days catch-up viewing since the early 1990s, it has only been in the last few years that BARB has been consistently measuring the time spent on other TV screen based activities. From the middle of 2013 onwards, BARB has been progressively capturing 8-28 days catch-up viewing, using the TV to listen to the Radio, and most recently BBC iPlayer and Sky non-linear viewing, as well as the time spent on unknown activities that have been BARB measured since July 2013 and have more recently been grouped together as a single category called ‘Unknown viewing’. This category covers everything from TV based SVOD (Netflix, Amazon, Now TV, etc.) to Broadcaster’s non-linear VOD (where not separately measured), as well as post-28-days catch-up viewing (whether PVR or Broadcaster VOD based), watching DVDs, and not least of all gaming, and this ‘Unknown viewing’ has been growing significantly in recent years, though unfortunately it has only been reliably BARB measured since July 2013.
Even more interesting, however, is the fact that for all the main younger age-groups, the decline in schedule based TV viewing (defined for simplicity in the discussion below as Live + 28-days catch-up viewing) correlates extremely closely with the corresponding growth in the ‘Unknown viewing’ category. While correlation doesn’t necessarily imply causality (and a full discussion of the underlying statistical analysis is beyond the scope of this note), the consistency of the results is compelling, with a substantial proportion of the lost schedule based TV viewing for younger audiences being compensated for by a corresponding growth in ‘Unknown viewing’. So, for Children 4-15 we find that they watched 120 mins of Live + 28-days TV per day in 2014 and this fell to 89 mins per day by 2017 (down 26%), but with ‘Unknown viewing’ rising from 35 to 53 mins over the same period, their total time spent in front of TV sets has paradoxically fallen by only 8% from 155 mins in 2014 to 142 mins in 2017. It is a similar story for all the other under 55 age-groups. For Adults 16-34 Average Daily Minutes of Live + 28-days viewing fell from 159 to 127 mins between 2014 and 2017 (down 20%), but with ‘Unknown viewing’ growing from 39 to 61 mins, their overall TV set time only fell by 5% from 198 to 188 mins. For Adults 35-54 Live + 28-days viewing fell from 227 to 207 mins per day between 2014 and 2017 (down 9%), but with ‘Unknown viewing’ growing from 25 to 41 mins, their total TV set time only fell by 2% from 253 to 248 mins. For Adults 55+, on the other hand, there was virtually no change in Live + 28-Days viewing, which went from 327mins per day in 2014 to 326 mins in 2017, so with ‘Unknown viewing’ growing from 14 to 21 mins, total TV time was actually up by 1.5% from 342 to 347 mins, suggesting that for older viewers ‘Unknown viewing’ is more of a complement than a substitute for their schedule based TV viewing.
So, what is going on? The first thing that needs to be appreciated is that even younger viewers prefer watching long-form video content on the best available screen, and this is particularly true of the type of high quality content that is the core staple of major TV broadcasters and their VOD rivals. Tablets and smartphones have undoubtedly had a fundamental impact on our video consumption habits (we can literally watch videos almost everywhere and anywhere) but who wants to watch the latest episode of ‘Blue Planet’, catch-up with ‘Game of Thrones’, have a binge of ‘Stranger Things’, get in some family time with ‘Gogglebox’ and ‘I’m a Celebrity’, or even just relax with old repeats of ‘Friends’, squinting at a small screen when one has ready access to a 50-inch HD TV set complete with comfy sofa. It is no surprise that at Digital UK’s recent Outside the Box event, Channel 4 director of consumer insight Sarah Rose pointed out “that two-thirds of All 4 viewing takes place via TV sets, as opposed to computers or mobile”. The available evidence seems to suggest that viewing on smaller screens has in all likelihood been more of a complement than a substitute for traditional schedule based TV viewing, and it is only as the ability to readily watch a broad range of high quality VOD content (the bulk of which is non-linear or outside of the traditional catch-up window) on TV screens has proliferated in recent years that we have seen substantial declines in the levels of traditional schedule based TV viewing among younger viewers.
It is of course true that although we know that younger viewers have been substituting their more traditional schedule based TV time for unknown TV set based viewing, BARB data cannot currently tell us precisely what this ‘Unknown viewing’ is. Undoubtedly, younger viewers will be spending some of this unknown TV time on already well-established activities like gaming (the BARB data suggests that around 23% of unknown TV viewing is via game consoles) or watching DVDs, but it is also highly likely that younger viewers have been increasingly substituting a proportion of their schedule based TV viewing for viewing of non-linear (i.e. non-schedule based) VOD content on their TV screens. This hypothesis is supported by BARB’s own Establishment Survey data on the rate of SVOD penetration in recent years, with the latest figures showing that SVOD subscriptions rose from 14% of UK households at the start of 2014 to 33.7% in the 3rd quarter of 2017. It is also the case that SVOD households are heavily skewed towards younger viewers, with around 50% of under 55s having access to least one SVOD service, with BARB’s latest white paper noting that: “we can see that access to SVOD services is highly prevalent in audiences under 55 […] far from being niche, SVOD services are now an established part of the television ecosystem”.
As for the SVOD services themselves, in terms of subscriber numbers Netflix is still the dominant UK player by a significant margin, although Amazon has been narrowing the gap since mid-2016, with Now TV coming in third place. The SVOD services, most notably Netflix, are now also readily accessible through a wide range of smart TVs, set-top boxes (STBs), and USB stick plugins, with some new smart TV models even coming with a dedicated Netflix button on the remote. My own estimates also suggest that in 2017 UK viewing on all SVOD services combined may have contributed in the region of 15 minutes of video viewing per person per day, and substantially more than this for younger viewers. To put this in context, this makes the SVOD services the rough viewing equivalent of CH4 and ITV2 combined, and they can now readily compete with the more traditional TV broadcasters for eyeballs (particularly younger ones) on TV screens. On top of this, traditional TV broadcasters have also been competing against their own linear channels by expanding their non-linear VOD offerings, with the most recent example being the pre-Christmas release of a sizeable range of box-sets on the BBC iPlayer, followed by the release of all 6 episodes of the new crime drama ‘Hard Sun’ immediately after the (6th of Jan 2018) premier of the first episode on BBC One.
So, is this the Death of Television? Despite all the challenges outlined above, I’m still very much of the opinion that the imminent demise of schedule based television remains a highly unlikely outcome. While it is easy to be influenced by the perennial doomsayers, another way to look at the situation is that in view of all the competition and market fragmentation highlighted above, it is a testimony to TV’s remarkable resilience just how much schedule based TV is still being watched, even among younger viewers. It is true that the SVOD services have experienced a particularly strong period of recent growth, but this has been off the back of huge (and potentially unsustainable) investments in content. As the market becomes ever more saturated, it is likely that the growth in SVOD subscriptions and viewing will start to level off. Traditional broadcasters have also been fighting back, not only with their own new hit shows and associated VOD offerings, but in the case of the PSB broadcasters by lobbying for being granted appropriate prominence on the growing proliferation of Smart TV and STB homepages that have been placed in front of the linear channel lists (EPGs), with this being seen as an important step towards protecting investment in homegrown content. The SVOD services for their part have also started acting more like traditional broadcasters, with new episodes of some of their most important shows (e.g. ‘The Grand Tour’ on Amazon and ‘Star Trek Discovery’ on Netflix) being released weekly rather than all in one go, and there also appears to be a growing trend towards commissioning co-productions with traditional broadcasters (e.g. ‘Dirk Gently’s Holistic Detective Agency’ a Netflix / BBC America co-pro, and ‘Paranoid’ a Netflix / ITV co-pro).
The continuing importance and resilience of schedule based television is also highlighted by a very recent example of just how important traditional linear EPG prominence remains to channel performance. As well as offering reliable access to a wide range of non-schedule based VOD content, Virgin Media (VM) is currently the only pay-TV platform in the UK to have Netflix on its EPG (no. 204 on the linear channel list) as well as in its App section. It is therefore no surprise that, according to BARB, 40% of VM homes have a Netflix subscription, and this rises to nearly 50% of VM homes with access to at least one SVOD service, more than for any other UK television platform households. It would therefore not be too unreasonable to expect the viewing impact of a gain in linear VM EPG prominence to be relatively limited, especially for an already well established younger skewing channel like E4, and the SD variant of E4 at that (unlike Sky, VM does not currently operate an automatic SD/HD EPG channel swap). However, when on 09/10/2017 E4 SD (at 144) moved into BBC 3’s old slot (at 106) on the first page of the VM EPG, its Individuals 4+ Share of viewing on the VM platform immediately went up by 50% (from around 1.0 to 1.5) and has persisted at this level ever since, while in stark contrast E4’s Share of viewing on all other platforms (where there was no EPG change) was actually down by around 10% over the same timeframe.
While TV is evolving, there is every likelihood that more traditional schedule based television will continue to be an important part of the video viewing landscape for many years to come.
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