Thursday 8 December 2016

For advertisers, phones are killing the TV star

Published 12/06/2016 | 02:30

Ireland has the highest mobile video viewing figures in the world (Stock picture)
Ireland has the highest mobile video viewing figures in the world (Stock picture)

Three weeks ago, I moved into a new house. Among the dozens of things on the to-do list was to procure a new TV stand, without which the model we have wouldn't work. I thought I'd be motivated to get this done pronto. But it ended up sliding down the list every day. As I write, I still haven't gotten one.

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And guess what? There have been no complaints in the house. Almost all of the stuff we were watching before is still getting watched without a traditional telly.

Even though we now have a TV provider connection, the TV stand is still only a mid-level priority. (It's up there with getting a better shower curtain pole.)

But broadband? Now that's a totally different story. Crisis. Emergency. Chaos. The four days we endured without broadband were disruptive and maddening, puncturing work schedules, communication and - ironically - TV availability. You can bet that was at the top of the list every single day.

I doubt I'm alone in what I discovered here. The episode reminded me of how totally different the hierarchy now is when it comes to the traditional sitting room TV and modern entertainment devices.

With the advent of resources such as Netflix, online TV players and other internet resources, the position of the large screen in the corner has been severely diluted. And while some TV industry bodies might dispute this trend, the financial figures are now beginning to bear it out.

Last week, Ireland's telecoms regulator released a report showing that retail revenues from Ireland's TV providers fell by 8.3pc over the last year.

Some of that can be put down to competition and cheaper basic services, such as Eir TV or Saorview. But TV, just like print media, is undergoing some severe commercial challenges as ordinary people start switching over to phones as a primary video source.

So it wasn't really a surprise that a new PricewaterhouseCoopers (PwC) report on Wednesday said that television advertising in the US is about to be overtaken by digital advertising for the first time.

Its five-year outlook report on the entertainment and media sector says that the days of a single screen dominating video content are now over.

"People still gather around the sofa to consume great experiences," said Russell Sapienza, a senior executive with PwC. "But there's a shift in what device they watch and when they watch, with mobile creating more access throughout the day."

This, he said, is "challenging the traditional value of attention and the ability to monetise advertising dollars".

If our experience in Ireland is anything to go by, this is an understatement.

According to recent figures from the Television Audience Measurement (TAM) research body, there has been a 25pc drop in viewership of ads on Irish televisions in the last two years. According to the research, the average number of commercial spots seen per day on television has fallen from 40 to 30 among those aged between 15 and 34. It has fallen by an even greater amount, 26pc, among adults aged between 25 and 44, while home-makers and home-makers with children now see 25pc fewer ads on television than they did two years ago.

Even among adults over the age of 45, who might be expected to resist new trends more, the average number of commercial spots seen per day has fallen 16pc in the last two years.

The TAM ratings measure audience viewership for Irish broadcasters such as RTE, TV3 and UTV.

The downward trends in viewed ad spots is in line with recent research from Comreg, which showed that a majority of Netflix subscribers have switched off scheduled television or reduced their viewing.

According to the regulator, 14pc of those who have subscribed to online paid TV services have stopped watching live or scheduled television, while 43pc say that it has caused them to watch less live or scheduled TV.

"There are about 10 million households with a broadband line coming into the home with no television," said PwC's Russell Sapienza last week.

This, he suggested, is only going to increase. In the US, TV companies are preparing for it. Big cable TV companies such as Comcast and Cablevision are currently working on streaming-only services to take on Netflix and YouTube.

This isn't a futuristic bet but a belated reaction to what has already happened.

"At a time when TV networks are losing audiences, YouTube is growing in every region and across every screen," said YouTube's Susan Wojcicki last month.

According to the international measurement company Nielsen, YouTube on mobile devices is seen by more 18 to 49-year-olds than any single television service.

Nielsen, which also powers Ireland's TAM ratings, has released several pieces of research showing that TV audiences are declining relative to phones, tablets, computers and 'smart' video appliances.

But phones are the big draw.

Late last year, one of RTE's video partners - Ooyala - released figures showing that Ireland has the highest mobile video viewing figures in the world.

And figures from the Dublin-based analytics firm Statcounter show that Irish people use our smartphones to get content more than almost any other western country, with a third of all web access here now coming from our handsets.

It all adds up to one thing: we are nowhere near as captured by tellies as we used to be.

Some TV broadcasters appear to have figured this out. Sky, for example, has an online-only offering called NowTV. It even sells a Roku digital box that can reverse the service back up onto a full-sized telly. (It's currently only available in the UK but there are some signs that Sky may be preparing an Irish launch in the future.)

And that is surely the future for a large chunk of the market. Today's teenagers don't want a TV in their room. They already have one, in the form of their phone or tablet. And they sure as hell don't want to watch the Late Late Show with us.

Sure, I'll eventually patch up my telly. But I may leave it another week.

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