Two years ago at the Cannes Film Festival, acclaimed Hollywood filmmaker, Steven Soderbergh, said in terms of cultural real estate, we're in a "second golden age of television".
Last month, Netflix founder Reed Hastings predicted the death of TV, as we know it, will be within two decades. So who is right?
Media as a whole is fragmenting, with consumers able to choose from a range of new channels to access the content they want, when they want it, including catch-up services, streaming video on demand (SVOD) and the rise of internet video. Add to that a raft of new global players shaking up the landscape from outside the traditional broadcast space and moves by television companies to innovate in new areas.
The Deloitte Media Consumer Survey 2015, released in August, revealed the amount of time people spend watching movies and TV shows per week has increased from 16.6 hours in 2014 to 17.2 in 2015 – an average increase of 2.5 hours.
However, those figures include television on any device, not just the big screen in the lounge room.
Hastings' prediction is that within 20 years, all TV will be on-demand and linear TV will cease to exist. Stan CEO Mike Sneesby, while not putting a timeframe around it, is in agreement and believes all of the players are moving toward the same end point - TV inextricably linked to digital.
“One thing we can debate over is how long it will take, but there is absolutely no doubt the end game is the majority of TV coming through the internet pipe. This is not a threat to the free-to-air (FTA) model if you just treat the internet as another delivery mechanism," he says.
This device, that device
Seven West Media's chief digital officer, Clive Dickens, told AdNews that the network's ambition is to turn every IP connected screen into a television screen. While Dickens still says that broadcast television is the “most powerful form of television and will remain so for many years to come” he believes that screen entertainment, regardless of device, is all television.
“Television describes how screen entertainment makes you feel, it's not the distribution or platform. When my son is watching a YouTube video or my daughter is on Presto or my wife is watching Plus7, they're all watching television.
Yes, the method of distribution has changed - the short form, medium form, the long form, and the way of monetising it is changing, but it's all television.”
Part of Seven's bid to innovate in the landscape is to treat it that way. It recently announced plans to make its three channels, 7, 7Two and 7mate, available as live streams from December to give users the ability to watch the network “anytime, anywhere”. It was a move that angered regional broadcasters which accused Seven of overstepping the reach rule.
Nielsen/OzTam's latest multi-screen report found that in each of the past five years the proportion of time Australians spent watching live-to-air television dropped from 97:03 hours last year to 90.53 in Q2 this year. With that, time-shifted viewing was boosted to 8.11 this year from 7.58 a year prior.
While VOD might be a talking point in the landscape, Dickens claims on-demand and over the top (OTT) consumption “dwarfs” the consumption of SVOD services in Australia.
Network Ten chief digital officer Rebekah Horne said the viewers using catch-up still prefer a “like live” viewing experience, with the vast majority of views occurring in the first 24 hours of the show airing on broadcast television. She believes it’s “incremental”, not canibalisation.
“When you talk about catch-up, it’s incremental to broadcast so what we’re seeing, for example with The Bachelor, is really strong broadcast numbers, but also equally strong catch-up numbers,” Horne says.
Small but hyper-engaged
While the way consumers access content might be changing, the other shift has been how they engage with it.
Deloitte found 85% of Australian respondents multi-task while watching their home TV – an increase from 79% the year prior. The most common thing to do while watching TV is using a social network (31%), followed by surfing the internet (30%).
This means TV players need to design experiences that increasingly engage viewers on two screens. Horne said any second-screen audience tends to be small but hyper-engaged.
However, she does warn against “overengineering” the multi-screen experience because it can be off-putting.
Facebook’s role in shifting the online video landscape can’t be ignored. The platform moved to reposition itself as a video platform earlier this year and now boasts huge numbers in the video space, with 52% of Australians watching video on its platform daily. Facebook Australia head of agency sales Ellie Rogers says the platform is definitely positioning itself as a broadcaster rather than a social networking site.
“We are going through a broadcast revolution and it is about how these two channels - Facebook and TV - can work really well together,” Rogers says.
“What I hear from clients isn’t ‘TV or Facebook’, that’s not the conversation. It’s, ‘can you work it out and come back to me with a packaged-up solution in a neat box?’”
She says a key example of the fruits of that labour is Seven’s recent premiere of the new season of X Factor as a Facebook stream, before it launched on traditional broadcast. While 100,000 fans were targeted and invited to watch the stream, Facebook has declined to share any figures that drill down into how many actually watched through to the end.
At the start of the year, there was a flurry of SVOD launches as Stan and Netflix entered the fray.
Telstra launched its TV streaming platform with Roku last month and of course there is the threat of Apple TV. Each of the FTA networks also has a catch-up player. Whether the market can sustain this many players is debateable.
EzyFlix has already fallen by the wayside and Quickflix has suspended trading on the ASX more than once. The then UM CEO, Mat Baxter, pointed out that the US - a far larger market - could not sustain this many players, suggesting consolidation is inevitable and that TV broadcasters need to work together to provide a unified catch-up service that provides a better consumer experience.
Recent figures from Roy Morgan suggest streaming hasn’t eaten away at the traditional broadcasters. Data from July revealed that Netflix reached 1.89 million people aged 14+ in July (or 8%). It found that only 7.3% of Foxtel-subscribed households are also using Netflix, a rate close to the national average. It means that while Foxtel’s share of audience has dropped to 76% from 95%, the size of its customer base is relatively unchanged at 2.3 million.
Stan’s Sneesby agrees that the use of the SVOD service complements rather than competes with TV as viewing takes place at a different time. What he calls the “streaming prime time” takes place after the traditional prime time of FTA viewing.
That said, he has some big plans for SVOD. At its launch, he predicted that 40% of households would be signed up to Stan in four years, but with the growth he’s seen so far, Sneesby is quite confident of 50% take-up in that period of time.
Horne says changes in the market will impact the landscape but she sees a natural conclusion.
“I think what invariably will happen is that things will at some point settle and there will be a natural market share for all of the players,”
Horne says. “It’s just understanding what that might be.”
What's in a view?
The scuffle over what a video view is actually worth is heating up. WPP’s Sir Martin Sorrell recently hit out at the low standards applied to viewership, calling the three seconds that Facebook counts as a view “ludicrous” when speaking by videolink to the Newspaper Works Future Forum in Sydney last month.
Shortly afterwards, YouTube vlogger, Hank Green, wrote an angry, yet composed, blog on the medium, calling out Facebook’s damaging take on video views. He calls out Facebook for cheating, lying and stealing, to make its claim that it now streams more video than YouTube. It’s all in a view.
Facebook counts a view as a video that has played for three seconds. That’s whether the sound has been activated or whether the viewer watches any further. It comes back to autoplay. Green claims Facebook’s completion rates and retention of viewers at 30 seconds drops off to around 20%, whereas on YouTube it is around 86%.
Since views are one of the core currencies used to talk about online video, he says over-counting and distorting the number of views is damaging.
“This might seem a little like this is a victimless crime, but it fundamentally devalues the #1 metric of online video,” he says.
YouTube though, is not without fault here. At its upfronts last month, it talked about increases in ‘watch time’ of videos on the platform – without sharing any data on what that actually means. Lots of views may not translate into lengthy view times.
This is the first in a three-part series on the television landscape. Next, AdNews will take a deep dive into measurement.
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