Watching TV: How Coronavirus is changing the channel
When the president of CBS famously claimed “TV is bigger than any story it reports,” he could never have foreseen the global pandemic that lay ahead.
But watching TV is already playing a huge part in keeping us informed and entertained as the coronavirus outbreak sees many temporarily housebound. TV viewing in the UK has increased 17% since the lockdown began, and daytime viewing is up 79% on the same time last year. A staggering 27 million UK viewers turned to their TV set to watch the Prime Minister announce social distancing measures last month, while 24 million watched the Queen’s speech. The story is the same in the US, with a 21% week-over-week increase in daytime viewing equating to 6.6 million additional households watching TV.
Even with limited TV production, the industry is showing inventiveness and resilience, with presenters and panellists live streaming from their homes and the broadcast frequency of pre-recorded soap content reduced to keep storylines moving. The cancellation of major sporting events such as Wimbledon is undoubtedly a blow to TV, with live sport attracting huge viewing figures, but networks are coming up with creative ideas including re-broadcasting classic content such as Euro 96, both to fill the gaps and to stir patriotic spirit.
Beyond the TV set: The many faces of TV
Of course, when viewers talk about watching TV they are no longer referring simply to linear or broadcast shows viewed on the TV set, they are also referring to an ever increasing range of video-on-demand (VOD) services they use to access content wherever and whenever they want it. Had the crisis occurred 20 years ago, we would have been raiding the shelves of our local Blockbuster store for content to pass the time in isolation. But now we can stream content at all times, switching between subscription video-on-demand (SVOD) services such as Netflix and Amazon Prime, broadcaster video-on-demand (BVOD) services such as the BBC iPlayer, and ad-supported video-on-demand (AVOD) services such as YouTube.
The SVOD sector was already skyrocketing, with the number of UK subscriptions for streaming services rising from 15.4 million in 2018, to 19.1 million in 2019. And this time at home will drive further growth, with Strategy Analytics calculating global subscriptions this year will increase by 5% in comparison to the pre-pandemic model. This would mean 949 million paid subscriptions worldwide by the end of 2020, and 1.43 billion subscriptions by 2025.
But competition between subscription platforms is already hotting up with the arrival of new services such as Disney+, and an inevitable squeeze on consumer spending may limit the ability to subscribe to multiple services. Streaming platforms may well need to explore other funding models such as AVOD, potentially introducing tiered pricing plans that combine elements of subscription and advertising. Transaction video-on-demand (TVOD) services like iTunes, where users pay for each piece of content as they want to watch it rather than committing to a monthly subscription, may also gain traction, especially with some film distributors releasing movies directly onto TVOD while the cinemas are closed.
TV advertising: Ad spend follows eyeballs
While it’s true advertisers are being cautious in the present climate, with ITV expecting a 10% drop in TV ad revenue this month, the brands that are still advertising will be looking to the environments where consumers are spending their time, including linear TV and VOD. Advertisers value traditional TV advertising for its mass reach and the trusted, impactful environment of the TV set. But they also want to advertise around VOD content as engaged viewers have actively chosen to watch it and it is addressable, meaning ads can be targeted to different audience segments, ultimately increasing efficiency.
Behind the scenes, tech companies are already working with broadcasters and video publishers to offer advertisers the best of both worlds; a converged ecosystem where linear TV enjoys the addressability of VOD, and VOD reaches the scale of broadcast TV. This will ultimately include universal quality standards and metrics against which to measure success. With advertisers needing their TV budgets to work harder than ever, reaching audiences who are unusually dependent on watching TV, the pandemic will inevitably accelerate this process, bringing us closer to a time when media planners don’t differentiate between linear and VOD; it all becomes TV.
These are uncertain and continually changing times, but they are compelling the TV and video industry to adapt quickly to inform and entertain mass audiences who are temporarily kept at home. TV advertising will need to be equally agile, allowing advertisers to make best use of limited budgets, so Covid-19 is likely to accelerate the shift towards a converged ecosystem where the various forms of TV are as indistinguishable to advertisers as they already are to consumers.
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