Live TV no longer 1st viewing choice

According to findings from Decoding the Default, the annual study by Hub Entertainment Research which tracks the TV sources US consumers consider their go-to viewing platform, there is a continuing increase in multiple platform use and a steady move away from live TV as a default source.

Highlights from the study:

1) Multiple Platforms Proliferate: Consumers are using more sources for TV watching than ever before.

The average consumer has 4.5 different sources to choose from when they’re ready to watch TV, including linear TV, DVR, video on demand, Netflix, Hulu, etc. That number is up from 3.7 in 2014.

Among younger viewers age 18-34, the number of platforms is even higher (5.1 different sources).

As just one example, half (50 per cent) of 18-34 year-olds subscribe to two or more of the ‘big three’ SVoDs: Netflix, Hulu, or Amazon.

2) First Choice No Longer: With multiple sources at their disposal, only 39 per cent of viewers now say live, linear TV from a traditional pay-TV service is what they turn on first.

That’s down 8 points from just last year, when 47 per cent called live TV their viewing default.

Consumers are now more likely to turn first to an on-demand, time-shifted source of TV, including Netflix, Hulu, Amazon, a DVR, or pay-TV video on demand (48 per cent combined).

3) Live TV Down in Core Demos: Consumers who consider live TV their default has dropped significantly across the board, even among older viewers.

The majority (56 per cent) of viewers 55 and over still default to watching live. But one year ago, it was two-thirds (66 per cent).

Among those 18-34, only about a quarter (26 per cent) say that live TV is their default. One year ago, it was more than one-third (35 per cent).

“We’ve been watching live TV drop steadily as a default source since we first conducted this study in 2013,” said Peter Fondulas, principal at Hub and co-author of the study. “But this is the first year where we’ve seen a sharp drop among older consumers too which has huge implications for the monetisation of linear TV in general. As online, on-demand platforms continue to become mainstream, live viewing has become the exception rather than the rule.”

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Alarming Falls in Linear Viewing Loyalty

The news that viewers are switching away from conventional live TV is hardly new. But a report from equity analysts at Deutsche Bank, and prompted by a detailed examination of the main advertising catalysts for Europe’s main public broadcasters, shows alarming falls in viewing loyalty.

The report says that the costs of reaching these viewers is rising for advertisers and as a consequence the bank is recommending to investors that they “SELL” their stakes in French commercial broadcaster TF1, as well as Spain’s Mediaset and Atres Media (the former Grupo Antena 3/A3TV).

“Over the past two weeks we have conducted our quarterly discussions with eight representatives of advertising agencies responsible for buying TV advertising, and industry sources connected to sales houses. We speak to the local offices of the major agencies to get on-the-ground views. The major conclusions on ad spend on TV are that in the UK, late money has delivered surprisingly strongly, but in all other markets, spend has been less than the broadcasters’ guidance at 1Q results over April & May,” says the bank.

The consequences are quite dramatic. The declines have prompted Deutsche Bank to revise downwards its expectations for TF1 by 10 per cent-11 per cent, and 2 per cent-9 per cent for Mediaset Spain and Atres. German media giant RTL is trimmed by 1 percent, although a surge of advertising coming into ITV and Mediaset Italy has encouraged the bank to upgrade the pair by 3 per cent-4 per cent.

As to the decline in viewing linear TV, the bank says: “That we are watching more on-demand programming from tablets, mobiles and smart TVs, as well as PVRs, is well established. But the hard data across Europe is very partial and the measurement of on-demand viewing is inconsistent and partial. But we now have full data for 2017 viewing levels across all European markets from national measurement agencies & Group M. This shows that the linear viewing decline accelerated over 2017. Even in Germany, which has been relatively slow to adopt on-demand, saw viewing fall in 2017 for the first time. It also shows on-line is failing to offset live viewing declines.”

The bank adds that this shift to on-demand viewing means a consequential share loss for Euro broadcasters. “Compare a 5-30 channel home in a traditional DTT (Freeview/TNT) world with the almost unlimited content available on a mobile device, tablet or a broadband-connected “smart TV”, from YouTube, Amazon Video, Google Play, Vice News, Eurosport Player and national platforms like Daily Motion, Magine, Cofunk, Magine TV. Not all of these carry advertising, but many do. In this world, traditional broadcasters are clearly failing to replicate their share of TV advertising spend. We have shown this in prior TV Ad Monitors for all Euro TV groups, but we now have estimates based on our industry contacts for the latest UK online video ad share.”

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