If the TV industry were to update its Facebook status explaining its relationship with the Internet and web-native companies, it would almost certainly be set to ‘It’s complicated’. And the Internet’s relationship with TV could be described in much the same way. Here Tess Alps, Chair of Thinkbox, the UK TV industry’s marketing body, which is now ten years old, takes a look at various aspects of that relationship.
In 2005 in the UK, Thinkbox was created. This was, in part, a reaction to the many doom-mongering stories about TV emanating from global internet companies that had not been challenged and had taken root.
Looking back it’s interesting to see what has actually happened, how TV has evolved over ten years and how the doom-mongering has changed. Because I’m afraid there will always be people who want to see TV in difficulties, even sometimes from within its own industry. But below would be the four key points to understand.
The future (of advertising) is video
Big tick. We’ve won this one. Whatever sort of media company you are, text, static visual or audio-based, you’re trying to increase the amount of audio-visual advertising you carry. Print-based newspapers and magazines are also increasing the amount of video journalism.
But not all video is equal. There is a vast range of video formats from moving escalator panels to auto-play pop-ups. Even within TV and video-on-demand, we see a range from short-form vloggers to cinematic premium content like Game of Thrones. And even the same content can present very different advertising opportunities depending on the physical and emotional context in which it’s seen. Watching a live football match on your way home on a smartphone offers a different ad opportunity from watching with your mates around a 54 inch flatscreen. Not better or worse necessarily, just different.
One disappointing and frustrating aspect is that online video advertising companies tend to think the best way to get more money is to attack TV budgets. This belief has given rise to the idea that it’s ‘team internet versus TV’, where TV is perceived as the enemy. However, they’d do far better to align themselves with TV companies to fight for more money for all forms of video advertising away from direct mail, or print or search. In fact, the more advertisers invest in TV, the more likely online video companies are to get higher budgets.
TV is More than 75 Percent of All Video
Every time we publish TV viewing stats a few people give us a really hard time because we haven’t included the time spent watching Netflix or YouTube. This is a bit rich given that: (a) Netflix won’t let anyone know their viewing stats; and (b) YouTube and the like are certainly not prepared to be measured in the same independent and impartial way as broadcast TV is in the UK by BARB. However, we do our best to put TV watching within a wider video context. The chart below is the result. Feel free to get in touch if you think you can improve the data but we have used all the most respected impartial industry sources (as opposed to someone’s online survey).
There are a few interesting observations to make. There is far less TV viewing on non-TV sets than you might expect, representing only 1.6 percent. On the other hand, there is a growing amount of TV set viewing that is falling outside the industry standard metrics in the UK (defined as live +7 days playback). The 4.4 percent of extra TV content watched via TV sets (which comprises watching DVDs, SVOD and broadcaster VOD viewed on sets) is growing but not yet counted within the TV total – and hence not easy to monetise.
YouTube etc sits within the non-TV online video figure of 9.1 percent but how interesting that ‘adult’ video (porn to you and me) represents another 50%+ on top. Not a great ad environment, mind. You can decide whether the 4.5 percent of other TV set video activity (basically gaming and Skype) should be included; we have taken out radio listening via TV sets. But it does illustrate the importance of separating out the device from the activity. We get annoyed when we see yet another piece of research positioning the use of tablets or smartphones as bad for TV. We think they are great, because they help people watch more TV out of the home.
TV Loves the Internet…
Whether web or mobile, connected technologies are being embraced enthusiastically by TV companies. I think people have got this now. TV advertising might compete with search or social media for budgets (though it complements these beautifully too for advertisers) but it’s not in competition with the ’internet’. Delivering TV content via the internet offers many attractions, not least of which is addressability to the household (TV sets are shared devices) and dynamic insertion of ads into playback. But it’s going to be some time before ISPs can offer the bandwidth necessary to enable broadcasting to be abandoned. At a recent conference the 3 biggest US ISPs said that in peaktime Netflix traffic alone took up 40 percent of their capacity. Even estimating a very high share of viewing for Netflix at 10 percent in the US, you can see the bandwidth deficit. For now.
…and even ‘TV Killers’ Love TV
Most of the companies that predict the death of TV are actually trying to become TV, and the likes of Google and Apple are using the word ‘TV’ because it’s aspirational and signifies quality to viewers. Netflix is hilarious. To my mind, there is no question it is part of the TV landscape – it buys content from broadcasters and producers, it’s available via TV platforms, it’s watched on TV sets, it invests in original content which it sells back to broadcasters – yet it positions itself as a TV-killer. Ah well. All of this makes TV a very competitive, fast-moving and turbulent industry, but also an expanding and vibrant one that is fascinating to document.