SVOD Disruption – Could DTT be the Antidote?

Freeview_Play_4K_TVDespite some notable mass audience success, with a much-anticipated Royal Wedding and popular 2018 FIFA World Cup, it has been yet another tough year for schedule-based television in the UK. The annual BARB measured Individuals 4+ consolidated (Live + 7-Days) Total TV Audience fell by 4.2% from 8.39 million in 2017 to 8.04 million in 2018, and if we eliminate the impact of population growth by looking at the Average Daily Minutes the decline is even more pronounced, with a 5.2% drop from 203.0 minutes in 2017 to 192.4 minutes in 2018 (down by 10.6 minutes). While the summer’s heat wave (as discussed in one of my previous notes) didn’t help, there can be little doubt that the disruption caused by the continued growth in SVOD (Netflix, Amazon, etc.) take-up is the primary cause of this continued decline in schedule-based television viewing levels. In fact, BARB’s latest SVOD take-up figures show that after stalling in the third quarter, the number of UK households subscribing to at least one SVOD service has risen substantially from 11.64 million in 2018-Q3 (40.9% of homes) to 12.3 million in 2018-Q4 (43.1% of homes). Not one to shy away from some shameless self-promotion, I’m pleased to say that my recent logistic trend forecast of UK SVOD take-up was virtually spot on with a prediction of 43.2% of homes subscribing to at least one SVOD service in 2018-Q4, a difference of just 0.1 percentage points!

The UK’s TV broadcasters are of course fighting back, with the BBC and ITV aiming to launch a UK version of their North American joint venture SVOD service, BritBox, in the second half of 2019. However, as part of my SVOD forecast I also noted that it was likely to be the quality of the UK’s free-TV offering that would eventually help limit the extent of SVOD take-up to around two-thirds of UK households by the mid-2020s, making the DTT platform (dominated as it is by Freeview/Freeview Play) another important element in the fight-back. It is also the case (as outlined in one of my earlier notes) that 2017 was an exceptionally good year for the DTT platform, with its consolidated Individuals 4+ audience actually growing by 2.3% from 3.84 million in 2016 to 3.93 million in 2017, while all other major platforms suffered significant audience declines. More importantly, this 2017 boost in the DTT platform’s performance was driven by an influx of younger viewers, with all the evidence suggesting that this was the result of cord-cutting, with younger viewers in particular switching from the pay-TV services on Sky/Virgin to the pay-lite/free-TV services on DTT.

The million dollar question, of course, is: how well has the DTT platform managed to fare in 2018? As well as the significant (SVOD disruption induced) downward pressure on schedule-based TV audiences affecting all the major TV platforms, has the DTT platform managed to resist the inevitable attempts by the pay-TV operators to recapture some of those illusive younger viewers?

In view of these considerable challenges, it is hardly surprising that between 2017 and 2018 the DTT platform’s consolidated Individuals 4+ audience fell by 2.5% from 3.93 to 3.83 million. However, this must be contrasted with the more pronounced year-on-year Individuals 4+ audience declines of the other major platforms, with Cable down by 5.8% (from 1.20 to 1.13 million) and Satellite down by 6.2% (from 3.08 to 2.89 million) between 2017 and 2018. As a result, the DTT Platform’s Share of the Individuals 4+ consolidated Total TV audience actually rose from 46.8% in 2017 to 47.6% in 2018, and while this is only a relatively modest gain of 0.8 percentage points, this builds on the substantial gains of the previous year, when after having been notably stable at around 44.4% a year since 2013 (the first full year after the digital switchover was completed in late 2012), the DTT Platform’s Individuals 4+ Share actually rose significantly to 46.8% in 2017 (up around 2.4 percentage points on the preceding 4-year average ). When looking at Commercial Impacts, the DTT Platform’s recent performance is even more impressive with its Adults 16+ Share of Commercial Impacts (SOCI), after growing moderately from 44.5% in 2013 to 45.8% in 2016, rising to 48.8% (up 3 percentage points) in 2017, and then rising again to 50.0% (up 1.2 percentage points) in 2018.

While all the evidence points to the gains of 2017 having been driven by cord-cutting younger viewers, one might well be tempted to speculate that the continued improvement of the DTT platform’s performance relative to the other major platforms in 2018 is more likely to be a consequence of the UK’s aging population. After all, elderly viewers are still significantly more likely to be living in a DTT Only household than their younger counterparts, and their schedule-based TV viewing hasn’t yet suffered any notable declines as a result of the SVOD disruption. The actual evidence, however, does not support this view. After the substantial gains of 2017, the DTT platform’s Share of consolidated Total TV rose again for the under-35s in 2018. For Children (4-15) the DTT Share rose from 31.7% to 32.7% (up 1.0 percentage points), while for 16-34 Adults the DTT Share rose from 36.5% to 37.7% (up 1.2 percentage points) between 2017 and 2018. By contrast, for 35-54 Adults the DTT Share rose much more modestly from 38.4% to 38.8% (up 0.4 percentage points), while for 55+ Adults the DTT Share remained virtually unchanged at 56.3% in 2017 versus 56.4% in 2018. It is also notable that the DTT Share gains for the commercially high value 16-34 Adults demographic become even more pronounced when looking at Share of Commercial Impacts, with the DTT platform’s Adults 16-34 SOCI rising from 39.4% in 2017 to 41.4% in 2018 (up 2.0 percentage points).

The evidence from the BARB Universes (i.e. estimates of the different types of people making up the UK’s television owning households) also suggests that cord-cutting by younger viewers has continued to play a role in the 2018 audience Share gains of the DTT platform. Between 2017 and 2018 the proportion of the total number of Children (4-15) in UK television households that were living in DTT Only homes rose from 30.9% to 31.9% (up 1.0 percentage points), while the proportion of 16-34 Adults rose from 35.6% to 36.8% (up 1.2 percentage points). By contrast, the proportion of the total number of 35-54 Adults in UK television households that were living in DTT Only homes hardly changed at all from 34.5% in 2017 to 34.7% in 2018, and it is a similar story for 55+ Adults at 49.6% versus 49.8%. It is also important to note that these are not just relative gains, whereby the number of uder-35s living in TV households has declined overall, but just less so in DTT Only homes. In fact, according to the BARB panel Universes, the number of under-35s living in DTT Only homes rose by 4.2% between 2017 and 2018 (up 334k), and the overall proportion of UK homes that own a working TV-set has remained notably stable at just over 95% in the last few years.

As well as demonstrating the remarkable resilience of the DTT platform, this also suggests that schedule-based television remains important to younger viewers, who, rather than simply choosing not to own a TV-set and watching YouTube and Netflix on their phones and tablets, are opting for DTT. Compared with one of the higher cost pay-TV options, or giving up on schedule-based TV altogether, it’s easy to appreciate how the combination of Freeview Play on a low cost 4K 50-inch smart-TV, supplemented with a Netflix, Amazon, or (perhaps soon) even BritBox subscription, is likely to be an attractive option for cash-strapped under-35s setting up their first home. A strong free-TV offering has always been a cornerstone of the UK’s media landscape, and its continuing popularity at a time of intense disruption is a good indication that the UK’s TV broadcasters can evolve to weather the storm, and thus continue bringing audiences (not just in the UK, but across the globe) engaging and unique British content that would otherwise be lost in a homogenised world of SVOD giants.

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 Adults 16-34, Adults 16+, Age Groups, Amazon, BARB, BARB Panel, BARB Universes, Commercial Impacts, Cord-Cutting, Death of Television, Digital Switchover, DTT, DTT Only Homes, DTT Platform, Forecasting, Freeview, Freeview Play, Netflix, Sky, SVOD, Television, Viewing, Virgin Media, Weather, YouTube | Leave a comment

The Rise of SVOD and the Future of TV

Better_Call_SaulIt’s finally happened, in late September 2018 BARB released the first instalment of Project Dovetail, with census level device-based data (which BARB has been publishing separately on their website since September 2015) being fused with people-based BARB panel data to provide demographic level audience estimates for TV viewing on PCs, Tablets and Smartphones, though viewing data for Smartphones is currently only available at the Individuals 4+ level. The main takeaways are that while multiscreen viewing (as was already clear from the historic device-based data) at best currently only adds around 1.5% to schedule-based TV viewing, its impact is more pronounced for younger demographics, and for the occasional programme it can be very significant indeed. Nevertheless, it seems clear that when it comes to high quality long-form video content, the key battle for viewers over the next 5 to 10 years will be fought on our ever bigger and smarter TV screens.

This is emphatically not something that has been lost on the FAANGs, who, unencumbered by the kind of regulatory scrutiny that a decade ago killed Project Kangaroo (a pay-VOD joint venture between BBC, ITV and Channel 4), have worked hard to get their apps on the home screens of as many Smart TVs and TV connected devices as possible. Netflix has even managed to go one further by striking deals with several major television manufacturers to have handy Netflix buttons installed on their remotes, and this is on top of the deals with pay-TV operators that make Netflix readily available through Virgin Media, BT(YouView) and, most recently, Sky Q set-top boxes. It should come as no surprise that globally 70% of Netflix viewing is through connected TVs. The net result, as outlined in my Blog from earlier this year, is that while our total TV screen time has hardly changed in recent years, there has been significant growth in Unknown viewing (which includes TV-based viewing of SVOD services) at the expense of schedule-based TV viewing, particularly for the younger age-groups.

In view of such stiff and largely unregulated competition, and with Ofcom’s EPG prominence review now well underway, it is hardly surprising that the PSB broadcasters have been lobbying hard for the Government to introduce legislation that ensures PSB prominence rules remain relevant. The case is being made that the value of their long established right (in return for their public service commitments) to the first 5 slots on all linear EPGs, though still extremely important (as I have argued repeatedly), is being steadily eroded, and so they are pushing for PSB prominence requirements to be extended to cover things like home screens and recommendation algorithms. The non-PSB commercial broadcasters naturally disagree, with Sky making the case for not extending the PSB prominence regulations, though it is perhaps telling of the likely trajectory of future legislation that in a recent speech Sharon White, Ofcom’s CEO, as well as reiterating her call for more collaboration, also noted that: “The ability to stumble across great UK shows, that an algorithm might not suggest, seems a principle worth protecting in an online world. […] Who knows. A ‘PSB button’ might be vying for space next to Netflix and YouTube on the television remote control.”

So, how much of a future threat are the SVOD services to schedule-based television? One thing that has caught many commentators by surprise is the sheer speed with which the SVOD services have managed to proliferate through the UK market. As part of its establishment survey, BARB has been estimating quarterly SVOD take-up since the start of 2014, and the occasional mid-year slowdown notwithstanding, the proportion of UK households subscribing to at least one SVOD service has increased rapidly, nearly tripling from 14% in 2014-Q1 to 41% in 2018-Q3. In less than 5 years SVOD has gone from niche to mainstream, an impressive achievement by any standards, particularly when one considers the fact that around 14% of UK households (a third of SVOD homes) currently subscribe to 2 or more SVOD services. In fact, as highlighted in Ofcom’ s Media Nations 2018 (pp. 12-13) report, purely in terms of the number of subscriptions, SVOD now exceeds pay-TV in the UK, as very few households subscribe to more than one pay-TV service. It is also highly likely that SVOD take-up in the UK will continue to grow in the coming years, with the leading incumbents (Netflix, Amazon and Now TV) continuing to invest in original content. The upcoming launch of major new SVOD services from Disney (set for a late 2019 US launch, followed by an international rollout) and potentially Apple (currently still only a rumour, though a 2019 launch seems probable), will in all likelihood also convert additional households to SVOD, as well as giving the incumbent players a run for their money. Encouraged by Ofcom, the UK’s PSB broadcasters have also been actively considering their own major SVOD propositions for the UK market, though whether this would ultimately be in the form of a joint-venture (potentially along the lines of the BBC/ITV BritBox service currently available in the US and Canada) or as independent services isn’t yet clear.

So, to what extent will we be even more of an SVOD nation by the mid-2020s, given that 41% of UK households currently have at least one SVOD subscription, how much longer can the rapid rise of SVOD really continue before it levels off? Ideally, we would answer this question by building a complex econometric model, accounting for potential causal factors like: the growth in the number of available SVOD services, how much they cost, how much they spend on content, the type of content they offer (is a significant move into sports rights on the horizon?), household demographics (which households are likely to be SVOD resistors), and not least the quality and availability of free alternatives. It is surprising, however, just how much we can learn from a simpler, yet intelligent, analysis and projection of the trends in the historical data, and thanks to BARB we have a readily available time-series of nearly 20 quarters of SVOD take-up data to work with.

The Figure below provides further technical details, and it is clear from the outset that neither a logarithmic nor an exponential trend projection provides any useful insights. The former, as well as being a relatively mediocre fit for the historical data, clearly underestimates the future potential of UK market SVOD take-up, while the latter, though a much better fit for the historical data, clearly generates unjustifiably optimistic projections. A simple linear trend, however, not only fits the historical data extremely well (predicting 99.3% of the variations in quarterly SVOD take-up between 2014-Q1 and 2018-Q3), but also appears to provide reasonable short-term forecasts, suggesting that if current SVOD growth trends continue for the next couple of years (and there are presently no compelling reasons to suggest they won’t) we could be looking at as many as 55% of UK households subscribing to at least one SVOD service by the end of 2020.

For longer term projections, however, a linear trend becomes problematic as it inevitably heads towards the 100% take-up mark, with SVOD take-up predicted to exceed 80% of UK households by the mid-2020s, and there are good reasons why this is unlikely. The quality of free-TV in the UK has always been a significant barrier to the number of households willing to pay (the compulsory BBC licence fee notwithstanding) for a TV service. In the US, for example, despite significant cord-cutting in recent years, around 78% of households are estimated to still have a pay-TV service, while in the UK only around 54% do. This resistance to paying for TV will (to some degree at least) almost certainly also extend to SVOD – why pay to watch Friends on Netflix (reportedly its most-streamed show in the UK), or even on Comedy Central for that matter, when you can currently also watch it for free on Channel 5? For many, a free service like Freeview Play, combining all the DTT channels with free catch-up/BVOD services (currently: BBC iPlayer, ITV Hub, All 4, Demand 5, UKTV Play, CBS Catchup Channels UK and Horror Bites), is simply enough, and broadcasters are investing significantly in the service to keep it competitive. It is also telling that in the US, where key SVOD services (notably Netflix, Amazon and Hulu) have been around for several years longer than in the UK, and where people are far more accustomed to paying for TV or TV-like services, SVOD take-up is currently estimated to have reached around 69% of households, and while there is certainly potential for further growth in the US market, it is difficult to envisage a realistic UK based scenario where SVOD take-up levels reach 80% or more by the middle of the next decade.

The question therefore remains, what are the likely upper limits of UK SVOD take-up and when are we likely to see the currently very significant rates of growth begin to level off. Clearly a more sophisticated approach than a simple linear projection is needed. Fortunately, there is an S-shape curve known as a logistic function that can help. It is often used to model the proliferation of new technologies through a population, beginning slowly with the early adopters, then spreading much more rapidly as it becomes mainstream, and finally slowing down again as the more reluctant late adopters are converted. The problem is that to model a logistic trend one first needs to stipulate a theoretical upper limit for the extent that one expects the technology to proliferate (the default being that it is taken up by 100% of the population), which is of course exactly what we are trying to find out – bit of a chicken and egg situation! We can, however, solve this dilemma by essentially doing some econometric reverse engineering and testing how well functions with different upper limits fit the historical data, and thus, through trial and error, arriving at the best-fit (i.e. the logistic trend with the highest R² value) solution. As it happens, the logistic trend that best fits the historical data (predicting 99.5% of the variations in quarterly SVOD take-up between 2014-Q1 and 2018-Q3) has a theoretical (asymptotic) upper-limit of 69% (i.e. the model suggests that the extreme upper limit of SVOD take-up in the UK is 69% of households). As can be seen in the Figure below, this results in the logistic trend model predicting that SVOD take-up will begin to progressively level-off in the early 2020s, and approach market saturation by the mid-2020s at around two-thirds of UK households. That being said, the results from any type of trend projection (even a relatively sophisticated one) need to be interpreted with a pinch of salt, as they rely on current and/or easily foreseen future market conditions applying over the forecast period (e.g. major new SVOD service launches in the near future, continued SVOD investment in original content, and the continued availability of attractive free alternatives), and cannot account for any significant disruptive paradigm shifts (e.g. as yet unforeseen disruptive technologies/services, the unexpected collapse of a key player, or major economic upheaval). Nevertheless, they do give us an idea of the likely direction in which we are heading, and the available data does suggest that a substantial minority (around a third) of UK households will remain resistant to SVOD.


So, while SVOD in the UK is likely to become even more mainstream, it will not be ubiquitous, which is good news for the UK’s TV broadcasters as this will go some way towards mitigating future losses in market share to the SVOD services. The last 5 years have certainly been testing times for schedule-based television, with worryingly significant year-on-year declines in younger audiences, and no indication that this is likely to level off for at least the next 2 years. That being said, and as I have repeatedly argued in my blogs this year, while one shouldn’t discount the fact that the industry is facing some very significant challenges, it is also very important not to underestimate the resilience and staying power of schedule-based television. It is easy to focus on the negatives and lose sight of the fact that schedule-based television remains something that we, on average, consume for several hours each and every day, and, despite unprecedented levels of market fragmentation, this also remains true for younger audiences. Ofcom’ s Media Nations 2018 (pp. 20-21) report puts the amount of time 16-34s spend watching video content across all devices (so this includes mobile device based viewing of video clips on YouTube for example) at 288 minutes per day, of which 46% (132 mins) is broadcast content [in the form of either Live TV (34%), Recoded playback (8%) or BVOD (4%)], while SVOD watched on a TV set only accounts for 10% (30 mins). In fact, schedule-based television remains the largest single video viewing category for 16-34s by a significant margin, while for the UK’s population overall, schedule-based television still accounts for a sizeable majority (71%) of video consumption, with TV set based SVOD accounting for only 6%.

Clearly there is a long way to go before schedule-based television is eclipsed, whether as a result of the SVOD services competing with TV on the big screen very directly, or the FAANGs (which of course also include SVOD’s Netflix and Amazon) competing for our screen time in general, or both. In fact, although there is no room for complacency, a far more likely outcome is that there will be convergence, with a new equilibrium where schedule-based television, though smaller, remains a major component of our daily video viewing routine. Binging on what you want when you want is great, but so is the communal Live TV viewing experience, as is catching up with shows that are still ongoing and being talked about, these are all things that meet fundamental needs in both the young and the old (albeit to different degrees). Schedule-based television and SVOD can co-exist and complement each other in the long-run, and the good news for us is that we’ll have even more great shows to watch on our bigger and better TV screens. To adapt a phrase from AMC’s Better Call Saul, the critically acclaimed Breaking Bad spin-off prequel, (which is currently available on Netflix in the UK, and where, in a very linear TV like manner, the latest season was released in weekly instalments the day after each new episode aired on AMC in the US): It’s all good TV man!

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 BARB, Death of Television, Econometrics, EPG, FAANG, Forecasting, Future TV, Netflix, Ofcom, Projections, PSB, Regression, SVOD | Leave a comment

The Death of Television 2 – Blame it on the Weather!

Heatwave_2A much-anticipated Royal Wedding and successful 2018 FIFA World Cup (with England reaching the semi-finals for the first time since 1990) have resulted in some notable mass audience success stories for schedule-based television in recent months. The 4th series of Love Island has also managed to break records for ITV2, attracting droves of younger viewers to the channel, and additionally helping to make the ITV Hub more popular than the BBC iPlayer in recent weeks. Indeed, the combination of the World Cup and Love Island resulted in monthly ad revenues for ITV being nearly 23% higher in June-2018 versus June-2017. The continuing popularity of schedule-based television has also been highlighted by the widely reported unhappiness of Virgin Media customers following the removal of the UKTV channels from the platform on 22-July, after the two failed to agree on a new carriage deal.

While no serious commentator would deny that the TV industry is facing significant challenges and needs to evolve to avoid being eclipsed, these recent events do appear to attest to TV’s underlying resilience and continuing relevance, and the fightback against the FAANGs does look to be gaining some traction, with both Netflix and Facebook experiencing notable share price drops after announcing lower than expected second-quarter subscriber/user growth. It may therefore come as a surprise to many readers that the BARB measured consolidated (i.e. Live + 7-Days catch-up) Individuals 4+ Total TV audience was 5.8% lower in 2018-Q2 than it was in 2017-Q2, falling from 8.07 million to 7.60 million. In fact, if we eliminate the impact of population growth and look at quarterly Average Daily Minutes of Total TV viewing, the decline is even more pronounced, with a 7.1% drop from 195.6 minutes in 2017-Q2 to 181.8 minutes in 2018-Q2 (down 13.8 minutes). Inevitably this will be cited by some commentators as evidence that TV is in terminal decline, and that the notable success of recent months can do nothing to prevent its inexorable demise. Is this, however, really what is going on?

It is no coincidence that we have been in the grip of a heat wave approaching the legendary status of that of 1976, and the notion that the weather has a significant impact on TV viewing levels is well established within the industry, with the rationale behind this being that, whatever the season, viewers are less likely to stay in and watch television if the weather is unusually warm and sunny, or vice versa if it is unusually cold, wet and dark. There is of course a strong underlying seasonality to television viewing habits in the UK, with Total TV being consistently lower in the spring and summer than it is in the autumn and winter, but the point here is that if, for example, one were to compare winter viewing levels in two different years, the expectation would be that, other things being equal, the more severe winter would have higher levels of TV viewing. With such a significant (7.1%) drop in 2018-Q2 coinciding with a heat wave, it is therefore noteworthy that (despite strong competition from the SVOD services) the year-on-year quarterly Average Daily Minutes of Total TV only fell 2.8% (down 6 minutes) in 2018-Q1, a quarter during which the weather was particularly inclement with the likes of ‘The Beast from the East’ and ‘Storm Emma’. In fact, declines in excess of 7% in quarterly year-on-year Total TV Minutes are not unprecedented, with 2014-Q1, for example, a particularly mild quarter weather wise, being down by a very notable 7.2%, a decline that was considered so significant at the time that BARB included an article in the 2015 edition of The Viewing Report outlining the findings of an analysis it had conducted on the impact of the weather on TV viewing levels. It is worth quoting the conclusion from this article (ibid., p 12) in full:

“…in recent memory, some commentators have tended to assume that if TV ratings are down year-on-year, this proves that people must be dropping out of the broadcast stream in order to watch content on new platforms like Netflix or YouTube. Our analysis here gives the lie to that non sequitur, showing as it does that there may be simpler (indeed, more elemental) factors in play. Our weather formula offers an important new method for analysing what can, at first sight, be perplexing variations in year-on-year viewing patterns.”

Given the well documented impact of the SVOD services on schedule-based TV audience levels in recent years, it is important to remember that BARB’s analysis was based on 4 years of weather and TV audience data ending in early 2014, so the underlying downward pressure on TV viewing that has characterised the last 5 years was still in its early stages. As such, it is perfectly understandable why no allowance was made for the impact of market fragmentation in BARB’s model, with any potential adverse effect on the model’s reliability over its analytical timeframe being limited. This is, however, something that will need to be addressed in any weather-based TV viewing model when looking at more recent audience data (starting from 2013 onwards), as failure to do so would result in significant model misspecification, making any associated predictions unreliable.

Our key objective is to assess to what extent the two weather variables: ‘Maximum Temperature’ and ‘Daily Sunshine Hours’, that were identified by BARB as having the most correlation with television viewing at the time, are still relevant in the more fragmented TV landscape of today, and if so, to what extent they help explain the very notable 7.1% drop in quarterly year-on-year Total TV Minutes in 2018-Q2. We have therefore adopted a quarterly timeframe for our model, and with the relevant weather data being available from the Met Office up to the end of June-2018, we are also able to cover the quarter of interest. What remains is to account for the impact of audience fragmentation, and while one option would be to incorporate a simple (effectively catch-all) time-trend into the model to help factor in the underlying downward pressure on schedule-based TV viewing levels, there is a more compelling (and statistically speaking also more robust) alternative.

From July-2013 onwards, BARB has been capturing 8-28 days catch-up viewing as well as the time spent on other TV-based activities ranging from SVOD (Netflix, Amazon, Now TV, etc.) to gaming, and as these activities cannot currently be reliably distinguished from one another, they are collectively categorised as ‘Unknown’ viewing. As discussed in my previous research note in the ‘Death of TV’ series (aimed at dispelling some of the misinformation around this topic and highlighting that, while facing significant challenges, TV is evolving rather than dying), the decline in the consolidated (Live + 7-Days) Total TV audience is closely correlated with the growth in 8-28-Days and (most notably) ‘Unknown’ TV viewing, and we now have 5 years (20 quarters) worth of relevant data to work with. The results of our final weather-based TV viewing model are outlined in the Figure below.


The main takeaways are that the weather variables identified by BARB are still highly relevant, and that by additionally factoring in the underlying impact of market fragmentation, our model can explain nearly 99% of the variations in the quarterly Average Daily Minutes of consolidated Individuals 4+ Total TV viewing over the last 5 years. The model also suggests that around half of the 7.1% decline in 2018-Q2 is likely to have been caused by the unusually warm and sunny weather, dispelling the notion that the underlying downward pressure on schedule-based TV viewing levels has suddenly accelerated.

Being able to isolate the impact of such occasional seasonal factors from true underlying structural ones is, of course, the basis of any robust forecasting model, and now more than ever it is important to gain a reliable understanding of the trajectory in which schedule-based TV viewing is heading. It is only by building robust forecasting models, that we can gain a better understanding of underlying vulnerabilities and test/inform strategies designed to avoid worst case outcomes. To end, as seems appropriate, with a weather-based analogy, while the forecasts linking accelerated global warming to rising greenhouse gas emissions are of scientific interest in their own right, their true value is in the role they have played in first persuading people of their veracity, and then informing strategies to help us actively counteract the worst of the predicted outcomes.

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 BARB, Death of Television, Facebook, Forecasting, Heat Wave, Impact Assessment, Model, Netflix, Regression, SVOD, Total TV Viewing, Weather | Leave a comment

The DTT Platform – Succeeding in the Face of the SVOD Challenge

Freeview_Play_PictureIn my previous note I discussed how 2017 was another challenging year for schedule based television in the UK, with the SVOD services (Netflix, Amazon, Now TV, etc.) in particular taking a bigger slice of the total video viewing pie, though it was also made clear that: “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.” With this in mind, it is worth highlighting how, despite a 3.6% downturn in the consolidated (i.e. Live + 7-days catch-up) Individuals 4+ Total TV audience between 2016 and 2017 (from 8.70 to 8.39 million), 2017 was actually an extremely good year for the DTT Platform (comprising Freeview and YouView). Between 2016 and 2017 the consolidated Individuals 4+ DTT Platform audience (covering viewing on both primary and secondary TV sets) actually grew by 2.3% from 3.84 to 3.93 million. As a result, after having been notably stable at around 44.4% a year since 2013 (the first full year after the digital switchover was completed in late 2012), the DTT Platform’s Share of the Individuals 4+ consolidated Total TV audience actually rose significantly to 46.8% (up 2.4 percentage points) in 2017, an increase that has been improved upon in the first quarter of 2018, with an unprecedented Share of 48.0% (versus 43.8% in 2016-Q1, and 46.3% in 2017-Q1). The DTT Platform’s recent performance is even more impressive when looking at Commercial Impacts, with its Adults 16+ Share of Commercial Impacts (SOCI), after growing moderately from 44.5% in 2013 to 45.8% in 2016, rising to 48.8% (up 3 percentage points) in 2017, and then rising again to 50.2% in 2018-Q1 (versus 45.1% in 2016-Q1, and 48.0% in 2017-Q1).

Such a significant bucking of the prevailing trend needs careful consideration, and an initial working hypothesis might be that the aforementioned gains have been driven by the DTT Platform’s naturally older skewing audience, through the combination of an aging population coupled with the fact that younger viewers are watching significantly less schedule based television, while the consumption levels of their older counterparts have remained high. The evidence, however, does not support this view. In fact, although the DTT Platform has (in line with all the other platforms) experienced declining audience levels for the under 55s in recent years, there was a notable levelling-off in 2017 that appears to have been unique to the DTT Platform. As a result, there was a corresponding increase in the DTT Platform’s Share of consolidated Total TV viewing between 2016 and 2017 for all the main under 55 age-bands, with the DTT Platform’s: Children (4-15) Share rising from 29.4% to 31.7% (up 2.3 percentage points), the 16-34 Adults Share rising from 33.7% to 36.5% (up 2.8 percentage points), and the 35-54 Adults Share rising from 36.3% to 38.4% (up 2.1 percentage points). In comparison, the DTT Platform’s 55+ Adults Share had the lowest percentage point increase (up 1.7) from 54.6% to 56.3%. For the commercially high value 16-34 Adults audience, it is also noteworthy that the DTT Platform’s SOCI rose from 35.9% to 39.4% (up 3.5 percentage points) between 2016 and 2017, and then rose again to 41.6% in 2018-Q1 (versus 35.5% in 2016-Q1, and 37.7% in 2017-Q1).

So, what is going on? It is important to make clear from the outset that this is not the result of some recent fundamental change in the TV viewing habits of DTT Platform viewers. Generally speaking the TV viewing habits of people in DTT Only households are very similar to those in households with access to Cable or Satellite, with a comparable decline in the Average Daily Minutes of schedule based television viewing for younger audiences, and a corresponding increase in other TV screen based activities, reflecting a growing appetite for consuming non-schedule based long-form video content (notably SVOD, but also a growing slate of non-linear BVOD [Broadcaster VOD] offerings) on the biggest available screen in the home. What has changed, in fact, is that there has been a significant recent increase in the number of people in DTT Only households as measured by BARB, and even if the average person is spending less time watching schedule based television on any given day, you can still increase the overall TV audience if you increase the number of people that are available to watch.

The different types of people living in the UK’s television households are technically known as the BARB Universes, and between 2016 and 2017 there was a substantial increase in the BARB panel estimated DTT Only Universes, particularly for the younger age-bands. Between 2016 and 2017 the number of Children (4-15) in DTT Only homes grew by 13.5% (up 334K), while the number of 16-34 Adults grew by 12.5% (up 571K), and the number of 35-54 Adults grew by 8.1% (up 438K), with DTT Only 55+ Adults, despite the UK’s aging population, growing by a proportionally more modest 5.7% (up 514k). In fact, between 2016 and 2017 the proportion of 55+ Adults making up DTT Only households actually fell from 41.8% to 40.7%. While natural underlying population changes (the UK’s population is growing as well as aging) will undoubtedly have contributed to these results, the DTT Only Universe increases for the younger age-bands over such a short period of time are far too substantial for this to be the only causal factor. One possible explanation is that when BARB changed the way it estimates the total number of TV homes at the start of 2016, this may have inadvertently benefitted DTT Only over Cable and Satellite homes, but (notwithstanding that BARB would in any case be extremely unlikely to inadvertently introduce any systematic bias) a closer analysis of the corresponding monthly Universe changes rules this out.

So, what then are we looking at? It is hard to escape the conclusion that what we are seeing here is the UK’s equivalent of the cord-cutting phenomenon that has been affecting US pay-TV operators for a number of years, but which (until recently at least) has been far less of an issue in the UK market. The cord-cutting phenomenon involves consumers switching from higher cost pay-TV to lower cost free/pay-lite TV services, usually in conjunction with an OTT service like Netflix, Amazon or Now TV, and the DTT Platform has certainly evolved into an attractive proposition for consumers (notably cash strapped younger ones) looking to save money. Not only has there been a proliferation in the number of Freeview based (free-to-air) DTT channels, they can also be readily supplemented with a range of streamed pay-TV channels from one of the YouView based DTT/IPTV hybrid services being offered by BT and TalkTalk. Perhaps more importantly for younger viewers, however, is the fact that the broadcaster’s online players, as well as a range of SVOD and other online video apps (e.g. YouTube), are now routinely included in the software of DTT enabled set-top-boxes and Smart TVs. The lure of decent free TV and Catch-up on a big screen, coupled with a handy Netflix (to which you probably already subscribe) button on your remote, is practically the definition of what cord-cutting is all about.

However, if cord-cutting really is a significant contributory factor in the notable growth of the number of younger viewers in DTT Only homes between 2016 and 2017, we would also expect to see a significant decline in the number of younger viewers in Sky and Virgin Media homes over the same period. It is certainly the case that between 2016 and 2017 (according to the BARB panel Universe estimates) the number of Children (4-15) in Sky and Virgin homes (combined) fell by 3.9% (down 236K), while the number of 16-34 Adults and 35-54 Adults also fell by an even more notable 8.5% (down 801K) and 5.4% (down 589K) respectively. By contrast, the number of 55+ Adults in Sky and Virgin homes actually rose (albeit marginally) by 0.4% (up 38K). While this is compelling evidence, the BARB panel Universes are in fact calculated on a monthly basis, thus allowing for an even more robust statistical analysis, which shows a highly statistically significant negative correlation between the Universes in Sky and Virgin versus DTT Only homes for each of the aforementioned younger age-bands over the Jan-2016 to Dec-2017 period. Only for 55+ Adults is no statistically significant relationship detected. Correlation, of course, isn’t causality, but considering all the evidence combined, it seems highly likely that a substantial proportion of the recent growth in DTT platform viewing has been the result of cord-cutting.

Sky and Virgin are of course fighting back (with Sky’s recent deal with Netflix being a good example), but the DTT Platform remains an attractive option and is also continually improving its offering, so it will be interesting to see how the situation develops, and this is all ultimately good news for consumers and the television industry as a whole. Competition doesn’t only drive down prices, but also drives up quality and creates an environment where all players must innovate to succeed. The golden age of television isn’t a thing of the past, but is happening right now.

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 Adults 16-34, Adults 16+, Age Groups, Amazon, BARB, BARB Panel, BARB Universes, BT, BVOD, Catch-Up TV, Commercial Impacts, Cord-Cutting, Digital Switchover, DTT, DTT Only Homes, DTT Platform, Freeview, Netflix, Sky, Smart TV, SVOD, TalkTalk, Television, Total TV, Virgin Media, YouTube, YouView | 1 Comment

The Death of Television – Is it Finally Happening?

Death of TVAlthough 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.

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 2020 Forecast, Adults 16-34, Age Groups, Amazon, BARB, BBC 3, BBC1, Catch-Up TV, Channel 4, Channel List, Channel Schedules, Children, Death of Television, EPG, EPG Prominence, EPG Reshuffle, EPG Viewing Impact, HD, HD/SD Channel Swap, ITV, Linear TV, Netflix, PSB, Smart Phones, Smart TV, SVOD, Tablets, Television, Total TV, TV in 2020, Virgin Media, VOD | Leave a comment

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:

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 | Leave a comment

EPG Prominence and Channel Performance – It Still Matters

VM_EPGIn the late noughties, I was at a conference where one of the delegates noted how EPGs (electronic programme guides) with their ordered lists of channels and schedule information were so archaic that they might as well be considered ‘Victorian’, if not quite steam powered, though the jury was still out on that one. With the viewing impact of EPG prominence being one of my core areas of expertise, I was not amused, but there is no telling some people and I was clearly dealing with a revolutionary who was convinced that the tyranny of the schedule was over and that no one would be watching any live television in a few years’ time. My work on the audience impact of EPG prominence for Ofcom a few years later certainly showed how important a good EPG slot can be when it comes to boosting and maintaining a channel’s performance. However, given all the changes and challenges the TV industry has faced in recent years, with the rapid expansion of internet based VOD and the associated OTT apps and services from Netflix to YouTube, can a channel’s position on a linear EPG anchored to a live broadcast schedule still have a significant impact on its performance?

To answer this question, I will begin with my perennial announcement that traditional schedule based television, even among younger viewers, is not dead or dying, but evolving, and as the only true demonstration of a forecaster’s abilities is past performance, I am happy to engage in some shameless self-promotion by noting that my Total TV viewing forecasts from early 2015 have so far turned out to be very much on the mark. If nothing else, there must be a plausible reason to explain why Amazon has been so keen to advertise the online release of ‘The Grand Tour’ on linear television – put simply, it is still the best and quickest way to get your message across to a wide audience. If schedule based television remains a force to be reckoned with, then it would also seem logical to assume that EPG prominence remains important, but in the interest of not engaging in a spot of ‘post-truth’ analysis (‘I believe it, therefore it must be true’) it is important to provide some actual concrete evidence to support this claim.

Ideally, of course, I would be conducting a comprehensive analysis of the viewing impact of recent EPG reshuffles, but unfortunately that would be well beyond the scope of this short research note, though I do have one rather compelling recent example that I can share. On the 29th of November 2016, 4Seven was moved from no. 195 to no. 143 on the Virgin Media EPG, which (when accounting for the occasional numbering gaps) constitutes a very significant gain in EPG prominence of 50 channel ranks. Just as importantly, 4Seven’s position on the Satellite (i.e. Sky & Freesat) and DTT (i.e. Freeview, YouView, BT, TalkTalk & Plusnet) EPGs did not change over the relevant timeframe, therefore providing a baseline for comparison. The Virgin Media platform is also one on which a combination of VOD (both SVOD and broadcaster catch-up) and PVR playback have been available for a long time, and even Netflix, the constantly touted killer of television, has been available on Virgin Media since the autumn of 2013, where it can be accessed from both the App section of the guide and at no. 204 on the linear channel list. With so many ways of escaping the tyranny of the schedule, one might be tempted to make the case that traditional EPG prominence, in the form of a gain in channel ranks on a simple channel list with linear schedule based information, is unlikely to have a significant impact on a channel’s performance, particularly on an advanced pay-tv platform like Virgin Media. However, while such pseudo-logical arguments are undoubtedly compelling, what does the actual evidence tell us?

The main piece of evidence must necessarily be 4Seven’s performance on Virgin Media (VM) and the Satellite and DTT platform control groups around the time it moved 50 channel ranks up the VM EPG on 29-11-2016. As it’s been around 3 months since this change took place, it is also reasonable to look at 4Seven’s performance in the 12 weeks before the VM reshuffle, and then compare this to its performance in the 12 weeks after. So, in the 12 weeks before its gain in VM EPG prominence, 4Seven averaged an Individuals 4+ daily Share of viewing of 0.199 on VM, while on DTT it averaged a daily Share of 0.290, and on Satellite it averaged a daily Share of 0.362. In the 12 weeks after the VM reshuffle, 4Seven averaged an Individuals 4+ daily Share of viewing of 0.485 (up 144%) on VM, while on DTT it averaged a daily Share of 0.356 (up 23%), and on Satellite it averaged a daily Share of 0.420 (up 16%). Now, all of these changes are statistically significant, so clearly 4Seven was doing better on all platforms in the period after the VM reshuffle, but what cannot be ignored is the sheer size of the performance gain on VM relative to the control groups, with 4Seven’s average daily Share of viewing on the VM platform being nearly two and a half times higher post reshuffle, while there were only relatively modest gains of less than a quarter on both DTT and Satellite. Even more pertinent, however, is the fact that when we look at 4Seven’s performance time-series in detail, there is a highly pronounced upward step-change in 4Seven’s Share of viewing on the VM platform at the precise time of its gain in VM EPG prominence, with no such step-change being evident on either the DTT or Satellite platforms where 4Seven’s EPG positioning has remained unchanged over the relevant timeframe.

This is certainly compelling evidence to highlight the continuing importance of EPG prominence to channel performance, and in the case of 4Seven, if we err on the side of caution and assume that its Share of viewing on the VM platform merely doubled as a direct result of the gain in EPG prominence, this still translates into an additional Individuals 4+ Average Audience of approximately 2,500. While this may not sound like much, it must be remembered that what this means is that every minute of every day 2,500 more viewers will (on average) be watching 4Seven as a direct result of the fact that it is now more visible on the VM channel list. If we were to translate this into the kind of ‘Big’ numbers that dominate online viewing reports, our analysis suggests that 4Seven stands to benefit to the tune of an extra 22 Million Hours (or 1.3 Billion Minutes) of viewing per annum.

So, yes, EPG prominence definitely still matters!

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 4Seven, Amazon, BARB, Channel List, Death of Television, DTT, EPG, EPG Prominence, EPG Reshuffle, EPG Viewing Impact, Forecasting, Freeview, Internet TV, Linear TV, Live TV, Netflix, Ofcom, PVR, Sky, SVOD, Tablets, Television, The Grand Tour, Total TV, TV in 2020, Virgin Media, VOD, YouTube | Leave a comment

Trends in Commercial Impacts – or How to Get Ahead in Television Advertising

eyeball-on-screenNot only has year-on-year quarterly BARB measured Total TV viewing (i.e. how many people, on average, are watching TV at any given point in time) in the UK risen for the first time in over 3 years from 8.25 million Individuals 4+ in 2015-Q2 to 8.30 million in 2016-Q2 (+0.6%), using a broader (and thus more robust) timeframe by comparing the year (i.e. 12 months) ending Aug-2015 with the year ending Aug-2016, we find that average Total TV viewing levels for Individuals 4+ have effectively remained stable (at around 8.80 million) over the last 2 years. Needless to say this is good news for the television industry!

That being said, looking back to the peak in Total TV viewing levels during the early years of the decade, there can be little doubt that there has been a significant downward adjustment, though television has retained its position as the best medium for quickly, effectively and (by no means least) verifiably reaching a mass audience. The recent news that Facebook has significantly overestimated how much video people have watched on its platform for the last two years is certainly a rather timely validation of the fact that, despite the perennial claims that TV is dead, advertisers have rightly retained their confidence in the power of television. As long as the demand is there prices will ultimately adjust to reflect changes in supply, and the fact is that despite the declines in viewing levels, TV net advertising revenues in the UK have risen consistently from £3.5 billion in 2012 to £4.1 billion in 2015 according to Ofcom. Nevertheless, while advertisers are clearly still willing to pay for the mass audience impact of television in an increasingly fragmented media landscape, it is interesting to speculate about how the amount of advertising actually being watched on television has changed over the last 5 years.

Focusing on the broadest trading demographic (Adults 16+) and looking at the last 5 years (i.e. 12-month periods) ending August, the first thing to consider is that the BARB measured consolidated (i.e. Live + 7-day timeshifted) Total TV audience for Adults 16+ has declined significantly every year between 2012 and 2015, though it now appears to have stabilised with no further declines in the year ending Aug-2016. Nevertheless, we are still looking at an overall decline of 7.9% over the period in question. On top of this we also need to consider the fact that while in the year ending Aug-2012 live viewing accounted for 90.2% of the Adults 16+ Total TV audience, this has now dropped to 86.6% for the year ending Aug-2016. It is important to remember that BARB does not count any viewing that is fast forwarded, and as it is not unusual for 80% or more of ads to be skipped this way in timeshifted viewing streams (interested readers may wish to read my blog post on this topic), this is not good news for commercial broadcasters wishing to get more eyeballs on their ad breaks.

All this considered, one might therefore reasonably expect the total volume of Commercial Impacts (i.e. number of 30 second ad breaks viewed) for Adults 16+ to have declined significantly over the last 5 years. The actual data, however, tells a different story and despite a 7.9% drop in the consolidated Total TV audience coupled with rising timeshifted viewing levels, the number of BARB measured Adults 16+ Commercial Impacts has only declined by 1.5% over the last 5 years, less than a fifth of the decline in Total TV.

So, how can such a seemingly paradoxical feat be achieved? The simplest way would be for the BARB measured commercial channels to increase the number of minutes of advertising shown per hour, but while some tweaking might be possible, regulatory restrictions generally prevent the UK’s commercial broadcasters from doing so, with most already operating at the legally prescribed limits. More effectively scheduling to optimise the live viewing levels of key programmes could also help reduce ad-skipping, though again the overall impact (given the already highly competitive nature of the UK television market) is likely to be small. Launching more Commercial Impacts trading channels and/or improving the content of existing ones would be another option, though there would also be the risk of significant cannibalization. Ultimately, whatever the underlying causality might be, if the Total TV audience isn’t growing then the only way to get more eyeballs on adverts is for the commercial broadcasters as a group to increase their Share of Total TV viewing at the expense of the BBC and those commercial channels (like the shopping channels) that do not trade in BARB measured spot advertising. In other words, they need to increase their Share of the shrinking Total TV pie, and this is indeed what has happened. In the year ending Aug-2012, the Commercial Impacts trading channels had an Adults 16+ Total TV audience Share of 62.7, but by the year ending Aug-2016 this had risen to 65.6. This translates into 235,000 more Adults 16+ watching the Commercial Impacts trading channels in 2016 than would have been the case had their collective Share remained at the 2012 level.

As for what has ultimately driven this growth, one might reasonably point to the fact that (with the London Olympics and the Queen’s Diamond Jubilee) 2012 was a particularly good year for the BBC and some subsequent adjustments in favour of the commercial channels would always have been likely. Increases in commercial multichannel content spend (which are well documented by Ofcom) are also likely to have played a significant role, but what really stands out as the most probable primary driving force (particularly when viewed in conjunction with rising programming budgets) is that there has been a substantial proliferation in the number of Commercial Impacts trading channels over the last 5 years. In the year ending Aug-2012 there were 248 BARB measured Commercial Impacts trading channels, but by the year ending Aug-2016 this had risen to 300, a 21% increase over 5 years. It is also important to appreciate that we are not just talking about relatively minor/obscure channels, but notable brands like: Drama, ITVBe, Spike, Tru TV, TLC, BT Sport 1, 2 & 3, ITV Encore, My5, Your TV and Lifetime, and while there will inevitably have been a significant amount of cannibalization, the net result is that the Commercial Impacts trading channels as a group have benefitted from a substantial increase in their overall Share of Total TV viewing over the last 5 years.

This, more than anything else, puts the BBC’s closure of BBC 3 as a linear TV channel in February this year into perspective. It is the exact opposite of what the BBC’s commercial rivals have been doing, and while the BBC must rightly put on a brave future facing face, there can be little doubt that the closure of BBC 3 was driven by an overriding necessity to save money and not the belief that any resulting enhancement in the BBC’s online presence among younger viewers would be able to compensate for the loss of a highly successful youth orientated television channel. In fact, youth focused online brands like Vice Media are recognising the benefits of enhancing their market reach by launching linear TV channels, with Viceland UK having just launched (19/09/2016) on Sky in a relatively prominent EPG slot (channel 153).

With this in mind, it is worth ending with another compelling statistic. Among the high value Adults 16-34 trading demographic, the Share of Total TV viewing of the Commercial Impacts trading channels (for years ending August) has risen from 69.6 in 2012 to 75.8 in 2016, a collective increase that is comfortably more than twice BBC 3’s Adults 16-34 Share of 2.8 in 2015, its last full year as a linear TV channel.

Anyone interested in launching another Commercial Impacts trading channel or two?

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, Adults 16-34, Adults 16+, Advertising Revenue, Adverts, BARB, BBC 3, Commercial Impacts, Death of Television, EPG, Facebook, fast-forward, Linear TV, Live TV, London Olympics, Ofcom, Television, Timeshifted TV, Timeshifting, Total TV, Total TV audience, Total TV Viewing, TV, Viceland UK, Viewing | Leave a comment

Expectations versus Reality: TV Viewing by Age Group

kids-watching-tv-2715Over the last decade in particular, our industry has been plagued by poor predictions resulting from an overestimation of the disruptive viewing impact of technological change. To counter this, it has been suggested that any new forecast should be accompanied by the forecaster’s predictions from the previous year. With this in mind, in my blog post from this time last year I noted that 2015 was likely to be: “another tough year for television, with the Individuals 4+ Total TV audience predicted to fall to 8.78 million in 2015 (-2.0%)”. In the event, the actual 2015 Total TV audience in the UK was 8.75 million, down 2.3% on 2014. Not too shabby, even if I do say so myself!

As predicted, this also constitutes a notable slowing in the decline of UK television viewing levels over the last few years, and this is despite the fact that there is likely to have been considerable downward pressure on Total TV viewing levels in 2015 with both the warmest December and highest Employment Rate since records began. It is noteworthy that despite a decade of potentially disruptive technological innovations (with the proliferation of PVRs, internet based VOD/Catch-up services, tablets and smartphones) the BARB measured Average Daily Minutes of television viewing for Individuals 4+ in 2015 (at 216.4 minutes) are practically the same as they were in 2005 (at 219.0 minutes), giving some cause for optimism about the long term future of television.

Among those predicting the demise of television, however, a future scenario based around the changing viewing habits of younger viewers has been gaining currency. It is pointed out that while the disruptive viewing impact of technological change has been more marginal for older age groups, the impact has been much more pronounced for children and young adults (with the latter often being referred to, rather vaguely, as ‘Millennials’). It is then argued that as they age, the younger viewers of today will largely retain their much more limited television viewing habits, resulting in a sustained decline of overall television viewing levels going forward.

While it is certainly not implausible that our current viewing habits will have an influence on the viewing choices we make as we age, there is little to support the view that our habits will not also alter significantly with age. It has always been the case that older viewers watch significantly more television on average than their younger counterparts. So, even if we focus on relatively narrow age groups, it is true to say that in both 2005 and 2015 Children (4-15) watched less television on average that 16-24s, who in turn watched less than 25-34s, and so on. What has changed, however, is that in 2015 younger viewers watched significantly less television than they did in 2005, while older viewers generally watched significantly more. So, comparing Average Daily Minutes of television viewing in 2005 with 2015 we have that: Children (4-15) are down by 17.6% (135.0 vs 111.2), 16-24s are down by 21.2% (157.2 vs 124.0), 25-34s are down by 22.4% (208.4 vs 161.8), 35-44s are down by 11.4% (219.5 vs 194.4), though 45-54s are down by only 1.0% (241.9 vs 239.4), while 55-64s and 65+s are up by 12.5% (263.6 vs 296.7) and 13.6% (300.9 vs 341.9) respectively.

There are likely to be a number of factors that have resulted in this shift. Firstly, it is important to appreciate that since 2005 the digital switchover has meant that everyone (most notably older viewers who are generally later adopters of new technologies) now has access to multichannel television which, with the proliferation of PVRs and HD TVs, has greatly enhanced the quality, choice and convenience of the television viewing experience. This, combined with the exceptionally cold weather and low Employment Rate, certainly helps explain the exceptionally high levels of overall TV viewing over the 2010 to 2012 period, as well as the more recent declines over the last 3 years which have been characterised by milder weather and a strong economy. For younger viewers, however, it is also the case that BARB measured TV viewing levels have been declining much more persistently and were already starting to do so at a time when TV viewing among older age groups was at a record high during the early years of this decade. The most plausible explanation is that this has indeed been caused by the growing disruptive influence of technological change, with younger viewers spending an increasing amount of time using connected small/second screen devices instead of watching television on the big screen.

On the other hand, at least some of the time not spent in front of a TV set will be used to consume both live and catch-up TV content on a PC, tablet or smartphone, and as BARB’s Project Dovetail progresses the eventual incorporation of this viewing as part of the consolidated television audience figures will at the very least begin to mitigate any continuing future declines. That being said, the fundamental question remains of whether or not we are moving towards a fundamental paradigm shift that will see a continued youth driven decline in BARB measured TV viewing levels in the coming years, or are moving towards a new equilibrium that will see viewing levels stabilise. Though only time will ultimately tell, there is certainly some early trend based evidence that TV viewing is beginning to level out for the younger age-groups.

Another piece of evidence worth considering is how younger and older audiences choose to consume what they watch on their TV screens. BARB’s consolidated audience figures currently include all Live and 7-day timeshifted (whether PVR recorded or internet VOD based) viewing though any TV set or associated TV set connected device (be it a Sky+ box or games console), and we already know that according to the consolidated BARB figures young viewers on average watched significantly less in 2015 than they did in 2005 while older viewers watched significantly more. Based on this, one might also reasonably expect the way younger and older audiences distribute their TV set based viewing between Live only and 7-day timeshifted to have grown apart over the last 10 years. With this in mind, it is noteworthy that in 2005 98.6% of consolidated BARB measured Individuals 4+ TV viewing was Live only, with little variation across the different age groups. Unsurprisingly, with the proliferation of PVRs and VOD catch-up services, only 86.8% of consolidated BARB measured Individuals 4+ TV viewing in 2015 was Live only. However, contrary to expectations, there does not appear to have been a considerable polarisation in the amount of TV set based Live only versus 7-Days timeshifted viewing by age group. So, we find that in 2015 Live only TV set based viewing accounted for 85.0% of the Children (4-15) consolidated audience, for 16-24s it was 83.1%, for 25-34s it was 80.4%, for 35-44s it was 83.6%, for 45-54s it was 85.7%, for 55-64s it was 88.1%, and finally for 65+s it was 91.6%. If we are indeed heading towards a youth driven paradigm shift rather than a new equilibrium, one might well have expected the younger and older audiences to be much further apart.

In conclusion, despite a growing number of screen based activities competing with television, as well as numerous opportunities for timeshifted viewing of TV content, there does appear to be a substantial underlying demand for consuming Live schedule based programming on a big TV screen, even among younger audiences. As I have said many times before, the staying power of television should not be underestimated. It is a compelling form of entertainment which, despite significant challenges, is likely to remain an important element in the audio-visual media consumption habits of all ages 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 2020 Forecast, Age Groups, BARB, Catch-Up TV, Children, Death of Television, Digital Switchover, DVR, Employment Rate, Forecasting, Future TV, HD, High Definition, Internet TV, Live TV, Millennials, Project Dovetail, PVR, Smart Phones, Smart TV, Tablets, Television, Timeshifted TV, Timeshifting, Total TV, Total TV audience, Total TV Viewing, TV, TV in 2020, Viewing, VOD, Weather | Leave a comment

Forecasting the Total TV Audience in 2020

TTV_2020Annual BARB measured television viewing levels in the UK have fallen again significantly for the second year running, further highlighting the end of the exceptionally high and stable levels of Total TV viewing that were a hallmark of the new BARB panel over the 3 year period from 2010 to 2012. Having fluctuated at just over 240 minutes a day, Total TV viewing (i.e. both live and catch-up combined) for Individuals 4+ fell to 231.8 minutes per day in 2013 (-3.7%) and has fallen again to 220.6 minutes per day in 2014 (-4.8%). The growing UK population, however, has meant that the Total TV audience (i.e. how many people, on average, are watching TV at any given point in time) has declined somewhat less in percentage terms, falling from 9.59 million Individuals 4+ in 2012 to 9.30 million in 2013 (-3.0%) and then 8.97 million in 2014 (-3.6%).

The obvious questions to ask are: why is this happening, and where are we headed? The first thing to note is that through a combination of the general economic uncertainty and exceptionally cold winters in 2010 and 2011, followed by the ‘Jubilympics’ and an unusually wet summer in 2012, the 2010-2012 period must be seen as one where the Total TV audience was particularly high. After all, between 2009 and 2010 the Individuals 4+ Total TV audience rose by 8% from 8.89 million to 9.60 million (and then persisted at this level through to 2012), and while the BARB panel change in Jan-2010 may well have contributed to this (through a more accurate reflection of the evolving television landscape than the previous BARB panel), there is little reason to doubt that it also reflected a genuine underlying increase in the Total TV audience at the time. However, given the unusual nature of the 2010-2012 period, an eventual downward adjustment was always going to be likely. That being said, there can also be very little doubt that the increasing use of second screen devices (most notably tablets) to watch both catch-up and live television will have contributed significantly to the decline in BARB measured TV viewing levels (particularly among younger viewers), as viewing on such devices is not currently included in the BARB data. The good news is that BARB’s Project Dovetail has been making significant progress towards measuring and reporting viewing on such devices, though the complex nature of the task means that we are unlikely to see this reflected in the consolidated BARB viewing figures before 2016 at the earliest. It must also be acknowledged that Project Dovetail will not be able to counteract all the downward pressure on the BARB measured television audience, as opportunities to watch content outside the catch-up window as well as VOD films and material from broadcasters’ archives that fall beyond the scope of BARB’s Gold Standard consolidated TV audience metric continue to grow.

These are therefore clearly challenging times for the television broadcasting industry, and the latest figures will undoubtedly fuel the perennial speculation about the imminent demise of television. There has certainly been no shortage of rather extreme and largely unfounded claims, and as any serious analyst of television viewing habits will confirm, when it comes to speculating about the future of television it is (rather depressingly) far too often the case of not letting the actual facts get in the way of a good story about the death of television.

So, in the interest of letting the actual data (rather than new media pundits) do the talking for a change, what does one of the most relevant datasets (i.e. the BARB viewing data) tell us about the likely trajectory of the Total TV audience in the UK? Where are we likely to be in 2020? To answer this admittedly difficult question we’ve been developing a Total TV forecasting model built around the trends in the average daily minutes of viewing by age-band demographic (how much TV we watch a day and the rate at which this has been declining is highly age dependent) combined with ONS UK population projects (the UK population is aging but also growing) to generate a set of Total TV audience forecasts to 2020.

In the short term (with Project Dovetail unlikely to be implemented before 2016 at the earliest) all the trend based evidence is pointing towards another tough year for television, with the Individuals 4+ Total TV audience predicted to fall to 8.78 million in 2015 (-2.0%). To predict further into the future, however, we need to make some additional assumptions, and the best way to define where we are likely to end up is to forecast the likely outcomes based on two polarised positions to define a lower and upper forecast range, with the most probable outcomes being somewhere in between. Under the pessimistic lower forecast range we see the strong downward trends persisting through to 2020, despite the underlying efforts by BARB and the broadcasters to counteract this. This would see the Total TV audience fall to 7.96 million. The more optimistic upper forecast range, on the other hand, would suggest that through a combination of Project Dovetail and a persistent underlying demand for schedule based television (both live and catch-up, and irrespective of the platform or device on which it is consumed) there is a reasonable chance that we could actually see a significant recovery in the Total TV audience levels. This would see the Individuals 4+ Total TV audience rising from a predicted low of 8.78 million in 2015 to 9.06 million in 2020.

Based on the current evidence, the likelihood is that we will probably end up somewhere in between the upper and lower forecast ranges, but what to my mind certainly stands out the most is that even under the pessimistic lower forecast range we are still predicted to be in a position where in 2020 just under 8 million people in the UK are, on average, watching a combination of live and catch-up television at any given point in time. That is a likely minimum average of 8 million people in the UK watching TV every minute of every day in 2020, or to use one of those large numbers that new media pundits like to quote as evidence that VOD streaming services are eclipsing television, that is 4.2 trillion minutes of BARB measured television viewing. To conclude, while it is certainly true to say that television is evolving and facing significant challenges, this does not (as so many seem to believe) automatically translate into conclusive evidence that it is in decline. In fact, while it is difficult to predict the future, the actual direct evidence that we do have from the BARB panel suggests that television will prevail.

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 2020 Forecast, BARB, BARB Panel, BARB Panel change, Catch-Up TV, Death of Television, Forecasting, Project Dovetail, Tablets, Television, Total TV, Total TV audience, Total TV Viewing, TV, TV in 2020, Viewing, VOD | Leave a comment