10 reasons why linear TV lives on

The TV advertising market may be struggling, but the medium's popularity with viewers continues undimmed. Media Week analyses why on-demand has yet to kill off linear broadcasting

1. Capturing youth
It was feared the plethora of digital platforms, from games consoles to iPods, would distract younger people from TV.

Certainly, total viewing time among 16 to 34-year-olds has been declining faster than other age groups and Attentional expects this decline to continue - albeit at a slower rate - over the next five years. However, wholesale desertion has been arrested.

Marie Oldham, head of strategy at MPG, points out: "Five years ago, media agencies were presenting scary scenarios where the family was scattered to the four corners of the house and teenagers would be glued to a laptop in their bedrooms."

Young adults are investing more time in other media, but not necessarily at the expense of TV, which is most likely to be watched at the same time as internet browsing. Indeed, the most commonly debated topic on Facebook is TV programmes.

Julia Jordan, executive director, business and operations at UKTV, says: "TV is the anchor medium, a vital part of young people's social mix, as it offers inspiration, glamour and excitement."

Broadcasters have turned that appeal to their advantage by promoting material on social
networking sites. For example, series one of Skins was seeded on Bebo in 2007, gaining one million views.

Virgin Media Television is the broadcaster with perhaps the most to lose, says managing director Jonny Webb, since it targets 16 to 34-year-olds.

He adds: "Drift has stabilised because broadcasters are starting to deliver content on-demand in the way young people want it."

2. Multichannel increases viewing
By 2012, digital terrestrial TV will have replaced analogue transmissions across the UK in a transition that continues to have the greatest impact on TV's sustained popularity.

"Digital offers far greater choice of commercial TV," says Paul Rowlinson, Mindshare's investment director, audiovisual media. "Consumers have more choice and more control, underpinned by digital penetration."

The number of television channels has risen by 83%, from 236 in 2002 to 433 in 2008 (source: Ofcom). Meanwhile, commercial TV viewing has increased by 80 minutes a week over the past decade.

According to Attentional, people of all ages watch more television when they gain access to a greater selection of channels, after taking up one of the multichannel options.

Freesat's launch last May has encouraged 200,000 viewers aboard, while Sky Digital has added 171,000 subscribers in the past six months (to 9.25 million).

Sky and Virgin Media - which has 3.5 million subscribers - can expect to add further households in the run-up to digital switchover, but the bulk of conversions, largely from older age groups, will go to Freeview (14 million homes).

However, with 90% of the population already upgraded, future conversions will have a neutral impact at most, according to Screen Digest.

The flipside is audience fragmentation and an inevitable reduction in the total share of the main channels, eroding what used to be the major USP of TV: a massive and immediate reach.

Yet highly targeted audiences are appreciated by advertisers and help TV compete with media such as magazines and the internet.

Mike Parker, Channel 4's head of strategic sales and commercial marketing, reports: "The audience for Hollyoaks halves after the 18.30 programme, but a high percentage of those aged under 34 follow the next episode immediately on E4.

"Fragmentation is positive for TV," confirms Rowlinson. "The main commercial channels may have lost share, but they are still the only real destination that can guarantee advertisers millions of viewers in one place."

3. Old habits die hard
Instead of cannibalising the TV audience, on-demand usage has increased loyalty to the schedule. Downloads from the BBC’s iPlayer add 10% to the overall audience for popular shows, such as Torchwood.

Eric Huggers, media and technology director at the BBC, notes: iPlayer consumption mimics TV viewing behaviour, rather than internet use. The indications are that catch-up effectively extends prime time.

ITV’s Fincham says: Most consumption occurs close to broadcast, in the first 10 days, which indicates that people want the newest content and want to learn about it from promotion on linear channels.

Broadband TV services are used by 78% of users out of a desire not to drop out of broadcast schedules, reports Thinkbox.  Chief executive Tess Alps  says: The fact that both broadcast and online TV platforms are growing simultaneously underlines how they fulfil different needs and can co-exist and promote each other.

Rob Webster, Sky’s director of channel and operations, argues that channel brands have a great deal of currency and act as a pointer to quality.

It’s much easier to market 24 through the Sky1 prime-time schedule than it is as part of a collection of titles bunched together in an on-demand library, he says.

Catch-up represents an extremely small proportion of total TV viewing – less than 1%, according to Barb. There’s no doubt that online has had a huge impact, but it’s hardly a revolution in viewer behaviour, notes Mindshare’s Rowlinson.

4. Discovery
While most people use online TV services to catch up on missed programmes, a fifth (22%) are discovering new TV content.

"Classic seven-day catch-up is broadly used by families and older groups," says MPG's Oldham. "Younger age groups are taking more time to explore, perhaps leading to the discovery of a documentary or drama they would not otherwise be drawn to."

Measurement of this pattern, and whether online discovery subsequently leads to TV viewing, is tricky. BBC research suggests a significant "long tail": the top 10 most popular programmes account for a quarter of all those streamed via the iPlayer, while programmes ranked outside the top 50 comprise almost half the total consumption.

Since Barb doesn't measure it, the influence of online viewing on TV is subjective. But total viewing figures will be given a boost from 2010, when the ratings body introduces metrics for TV-based, online catch-up services.

5. Recession renaissance
As the pre-eminent form of cheap entertainment, it is logical that TV ratings rise while the economy and ad dollars slump. However, the correlation between viewing figures and the recession is superficial.

Deloitte's view, shared by many commentators, that "television may offer a refuge from everyday challenges, in a similar way that movies did in the Great Depression" is challenged by industry insiders.

"The phenomenon began long before the recession started to bite," says MPG's Oldham. "Prolonged periods of bad weather are as likely to have as much, if not more effect," adds Mindshare's Rowlinson.

However, the downturn should consolidate the upward trend. Continental Research suggests one in five households plans to curb spending on pay-TV in 2009 and Freeview expects to be one of the beneficiaries.

Deloitte urges broadcasters to take advantage of this period of comparative strength to invest in content, contracts and an updated infrastructure. Sky is doing just that through a Sky HD marketing drive.

The effects of people accessing - or being distracted from - TV by other digital platforms are not directly accounted for by the rise in TV viewing, since Barb only records scheduled broadcasts (or programmes recorded on personal video recorders and played at normal speed).

Linear TV has a lot of life in it yet, not least because broadcasters have learnt to package, market and schedule content that retains the viewer's interest.

6. Social currency
Live events, notably sport, have always proved the most powerful way to attract mass audiences and TV the best means of delivering them. However, broadcasters have made a conscious effort  to capitalise on this communal experience to counter the time-shifting threat.

"One of linear TV's weapons is the ability to create a sense of event viewing," says Channel 4's Parker. "By stripping programmes across a week (The Spa of Embarrassing Illnesses), grouping into a theme (Channel 4's Food Season) or multiple-week formats (Big Brother), we can stifle PVR use."

MPG's Oldham senses a fundamental human need: "For all that technology enables the personalisation of media, the one thing we all need is shared experience.

"If your friends are talking about Big Brother, you want to participate; if your family argues over The Apprentice, it brings people together in the living room. The content becomes social currency that people want to watch when it is broadcast.

"Broadcasters have capitalised on the benefits of greater interactivity and enhanced production values through smart repackaging, scheduling and cross-promotion.

The X Factor, Britain's Got Talent and I'm A Celebrity... dominated the top 10-rated shows of 2008 by "tapping into people's love of other people doing the same thing with voting and text", as UKTV's Jordan puts it.

Recognised TV brands are the beneficiaries of a "paralysis of choice for entertainment", believes Virgin's Webb. He says: "America's Next Top Model is increasing 15 to 20% every series because people are choosing familiarity."

Multichannel has also enabled producers to scale brands. "The sense of noise around the major shows is complemented by print and online, making them an event because they are ‘of the moment'," says ITV's Fincham. The concentration of this firepower is the Saturday night peak, where Oldham spots an Achilles heel.
"Other genres outside reality TV have not caught up," she says. "Shared family viewing across other genres and other week times will be a focus for broadcasters in 2009."

Last year also featured several quadrennial events - the Olympics, the US presidential elections and Euro 2008 - which partially contributed to the recent surge.

7. +1 channels
Time-shift channels feed viewers back to shows they may otherwise have missed.

 Plus-one channels have become an important part of consumers’ viewing repertoire and a great way of generating interest in linear models, says Channel 4’s Parker. Following its launch in August 2007, Channel 4 +1 now accounts for nearly 10% of total audience share for the broadcaster’s network.

Julia Jordan, who supervised the launch of UKTV’s Dave +1 on Freeview on 22 January, says: Plus-one channels are another means of increasing choice and improving the overall TV experience,  and a cost-effective way for broadcasters to offer different opportunities to view the same programme from the same channel the viewer has engaged with.

8. Enhanced experience
Spurred by digital switchover and price reductions, "the quality of in-home viewing on the main household TV has changed dramatically", declares Parker.

The explosion in demand for flatscreens has resulted in old-style cathode ray tube boxes of 24 to 32 inches being substituted for LCD and plasma widescreens, sized 32 inches and upward.
"TVs are fashion items," observes Chris Locke, UK trading director of VivaKi.

GfK and Sky estimate 7.4 million homes are equipped with at least one HD-ready TV, with one million of those receiving HD (source: Screen Digest). Sky is targeting an additional 220,000 Sky HD customers, with the aim of reaching 10 million by 2010.

Even those yet to subscribe will find added attraction in playing back HD DVDs on HD-capable screens.

High-definition and large screens differentiate the television experience from online, which is typically viewed on a much smaller display, with latency in streaming and programmes rarely at HD resolution.

Additionally, Deloitte reports, professionally produced content is reasserting its pre-eminence over user-generated content, both online as well as broadcast.

Mindshare's Rowlinson says: "The reduced quality and transient nature of most UGC is turning people back to TV." 

9. Appointment to view
Channel 4's Friday night live Ramsay's Cookalong  is one of a growing number of specially created events designed to reinvigorate the viewing experience, carefully generating and feeding from media interest.

"One-off and live events are very important," says Virgin's Webb. "Most Haunted Live has been completely re-engineered for Living and has been marketed to a huge paranormal fan base online."

Savvy advertisers have adopted the reverse approach, using TV to drive viewers online.
Honda's ground-breaking live skydive promo aired during Come Dine With Me (coinciding with a Honda dealer meeting) and reached 2.5 million viewers. A further 1.8 million watched online.

VivaKi's Chris Locke, who bought the spot, notes: "The power of TV is its ability to deliver appointment to view."

10. Digital Television Recorders boost viewing
Counterintuitive it may be, but when people get a Digital Television Recorder (DTR or PVR) they watch more television than before - 17% more, according to SkyView.

DTRs are in 28% of UK homes (combined Freeview+/Sky+), with more than 900,000 Freeview+ boxes sold as of December 2008 - a 118% annual rise, partly attributable to a national TV ad campaign last winter.

Furthermore, it is easier for viewers to remain loyal to programmes with a DTR. "By allowing people to catch up, you keep them engaged in a franchise," says Virgin's Webb.

"On-demand has become an essential component for any serialised programme."

A striking 85% of viewing in PVR households is still live (source: Barb/SkyView), providing further encouragement for broadcasters. Furthermore, more than half of all viewing on PVRs is watched on the same day as original linear transmission.

"One limitation of the PVR is that it has so much capacity, people don't have the time to play it all back," notes C4's Parker.

The DTR's arrival sent a ripple of fear through the advertising community, which assumed that, given the choice, consumers would skip ads. Yet time-shift represents 12% of total viewing, with 70% of ad breaks fast-forwarded.

Currently, this ad-skipping effect is compensated for by an increase in total TV viewing of approximately 20%.

"The net effect is that DTR owners have about 4% more exposure to ads than before," says Screen Digest's Vincent Letang.

However, the impact of these devices will become negative in the long term, as DTR penetration reaches about 50% of UK households by 2012 and DTR owners become bigger time-shifters as they get used to the device (source: Screen Digest).

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