More young people are watching less traditional TV

Jul 13, 2016

Young viewers are turning off their TVs in droves in favor of on-demand video services, according to new figures released by Ofcom, the UK’s broadcasting, telecom and postal industry regulator, The Guardian reports. The results from the report will be disconcerting to the companies who rely on traditional TV broadcasting, as the time spent watching traditional TV is dropping significantly amongst those aged 44 and below in the UK.

Here are some notable highlights from the Ofcom report about UK TV viewing habits:

• Viewing on TV sets is declining substantially across the board. Individuals in the UK watched an average of 3 hours and 36 minutes of broadcast TV in 2015, down from 4 hours and 2 minutes in 2010. This translated to an 11% fall in time spent watching TV.
• Young viewers are driving the drop in time spent watching TV. Since 2010, viewing on traditional TV dropped by over a quarter among 16-24 year olds and children, and by 19% for those between 25-34 year olds. Worryingly for traditional broadcasters, viewers between 35 and 44 year olds also reduced their time spent watching traditional TV by a substantial 17% in the last 5 years.
• But older generations are keeping traditional broadcast TV alive. Individuals between 55-64 years old reduced their watch times by only 5%, while there was no significant change in viewing for those over 65. It is unlikely that these demographics will significantly shift their TV viewing habits, which will allow traditional TV-oriented companies to continue to capitalize on their preferences in the coming years.
• On-demand services are becoming increasingly popular, especially among the young. Services like the BBC iPlayer, Netflix, and Amazon Video, are being used by around six in 10 adults. For adults between 15 and 24 years old and between 25 and 34 years old, the reach of these services climbs to seven in 10. Meanwhile, as on-demand services continue to invest in international content and expand overseas, we expect this number to increase over time.

Over the last few years, there’s been much talk about the “death of TV.” However, television is not dying so much as it's evolving: extending beyond the traditional television screen and broadening to include programming from new sources accessed in new ways.

It's strikingly evident that more consumers are shifting their media time away from live TV, while opting for services that allow them to watch what they want, when they want. Indeed, we are seeing a migration toward original digital video such as YouTube Originals, SVOD services such as Netflix, and live streaming on social platforms.

However, not all is lost for legacy media companies. Amid this rapidly shifting TV landscape, traditional media companies are making moves across a number of different fronts — trying out new distribution channels, creating new types of programming aimed at a mobile-first audience, and partnering with innovate digital media companies. In addition, cable providers have begun offering alternatives for consumers who may no longer be willing to pay for a full TV package.

Dylan Mortensen, senior research analyst for BI Intelligence, has compiled a detailed report on the future of TV that looks at how TV viewer, subscriber, and advertising trends are shifting, and where and what audiences are watching as they turn away from traditional TV.

Here are some key points from the report:

• Increased competition from digital services like Netflix and Hulu as well as new hardware to access content are shifting consumers' attention away from live TV programming.
• Across the board, the numbers for live TV are bad. US adults are watching traditional TV on average 18 minutes fewer per day versus two years ago, a drop of 6%. In keeping with this, cable subscriptions are down, and TV ad revenue is stagnant.
• People are consuming more media content than ever before, but how they're doing so is changing. Half of US TV households now subscribe to SVOD services, like Netflix, Amazon, and Hulu, and viewing of original digital video content is on the rise.
• Legacy TV companies are recognizing these shifts and beginning to pivot their business models to keep pace with the changes. They are launching branded apps and sites to move their programming beyond the TV glass, distributing on social platforms to reach massive, young audiences, and forming partnerships with digital media brands to create new content.
• The TV ad industry is also taking a cue from digital. Programmatic TV ad buying represented just 4% (or $2.5 billion) of US TV ad budgets in 2015 but is expected to grow to 17% ($10 billion) by 2019. Meanwhile, networks are also developing branded TV content, similar to publishers' push into sponsored content.

In full, the report:

• Outlines the shift in consumer viewing habits, specifically the younger generation.
• Explores the rise of subscription streaming services and the importance of original digital video content.
• Breaks down ways in which legacy media companies are shifting their content and advertising strategies.
• And Discusses new technology that will more effectively measure audiences across screens and platforms.

Source: Business Insider