An Interesting Time For Television
Alex North, head of commercial operations UK, AGB Nielsen Media Research, examines the state of the TV industry ahead of MediaTel Group’s ‘Future of Television’ seminar, looking at the myriad of issues that may arise during the debate…
Next week sees a defining moment for the UK television market. On October 17 Whitehaven in Cumbria will become the first region to lose analogue television signals, starting a five-year process that will conclude with everyone in the UK switching to digital.
A decade ago no one had digital television. Current penetration, according to the latest Ofcom figures, has reached 84% of households.
The television market is constantly changing, with new delivery platforms, new content, new ways of targeting audiences and a raft of new channels being set up to cater for the needs of the ever-discerning viewer – launches such as Virgin 1, brand extensions such as More4, and staggercast channels such as C4+1.
MediaTel Group’s ‘Future of Television’ seminar this week has been well timed, with a number of the industry’s key thinkers meeting to discuss the myriad of questions facing broadcasters, marketers and research practitioners going forward.
Certain subjects have been debated for some time. How successful will internet and mobile television be? Recent research by the RTS found that under-30s watch 40% of their television online or on-demand. The jury seems to still be out over mobile television.
What impact will Personal Video Recorders have on viewing patterns and on traditional 30-second spot advertising? We do a lot of work at AGB Nielsen Media Research on viewing habits, particularly how they change when new technology is introduced. Some of our recent studies have looked at technology opening up new genres and programming to viewers. Early evening programmes can easily be recorded and watched later with PVRs, and late night shows can be recorded and watched earlier in the day. This can lead to less reliance on broadcast schedules, more experimentation, wider repertoires and less channel loyalty.
Video on Demand is a prime example of content delivered whenever you want, and Internet Protocol Television (IPTV) will aid the delivery of this over a broadband line. With this technology you can also theoretically tailor advertising to certain households, sending a nappy advert to one house with a young child and a razor advert to the house next door containing a 16-34 male, simultaneously.
There is constant debate over how to best measure television viewing in this evolving marketplace. The arrival of IPTV and subsequently return path data from set-top boxes offers new research challenges and the opportunity to analyse viewing habits on a large scale.
As well as these much-discussed questions, there are also some newer debates that are raging. The Competition Commission is investigating BSkyB’s acquisition of a 17.9% stake in ITV, over whether it lessens competition in the UK television market. If BSkyB is forced to sell its stake, how will this be affected by the fact ITV shares have fallen since last November and the stake is now worth less. Will Virgin return to the fray?
Ofcom recently announced a consultation on the amount of advertising that can be shown per hour. Currently terrestrial channels are restricted to an average of seven minutes per hour, with a maximum of 12 minutes in any one hour. European rules could potentially allow the overall average to increase to 12 minutes per hour. Will this hinder the viewer experience and will it actually mean more advertising revenue? Will this matter if people are fast-forwarding the advert breaks? In this environment, optimising the break structure and timings becomes crucial, as does the importance of engaging adverts.
Television is an evolving medium, and in turn advertising will have to evolve to keep up. If traditional 30-second spot advertising is being affected by PVRs then we will have to look for new and innovative ways to reach consumers.
In the US in 2002, Ford tried this with their sponsorship of 24, when they tailored three-minute promotions to bookend the broadcast and thus allowed the actual programme to be run uninterrupted, without advert breaks. You could argue that people would be wise to this and wouldn’t sit through three minutes of Ford talking about their cars, but it generated a large amount of press coverage and showed a willingness to try a new delivery mechanism.
In August 2007, following the purchase by Google, YouTube started running advertising on some of their video clips. They show transparent adverts in the bottom fifth of the screen during the videos, so as not to disrupt the broadcast. If users click on the ad it will run fully, otherwise it disappears. Could this format work for television?
There are so many areas for discussion, but the simply reality is this – in five years time most of us will still be consuming large amounts of broadcast content from a screen in our living rooms. The format of that screen could be conventional television as it is today in some homes, or a broadband linked internet/television hybrid in others.
It is an interesting time for television, and the debates are set to continue long beyond the seminar this week.